Revisions to the Economic Impacts and Burden Estimates for the Rule Titled: Review of 

New Sources and Modifications in Indian Country 

This addendum summarizes the revised qualitative assessment of the economic and burden 

impacts of the rule titled: Review of New Sources and Modifications in Indian Country. Burden 

and costs estimates have changed from those estimated under the previous versions of the 

Economic Impact Analysis (EIA) and the Supporting Statement (SS) for this rule due to a change 

in policy before the rule was finalized. 

At the time the original EIA and SS were written, we planned to delay the applicability date of 

the rule for true minor sources that might be subject to the minor NSR program for a period of 18 

months from the rule’s effective date (60 days after the final rule is published). However, to 

address commenters concerns about EPA’s ability to implement this NSR permitting program in 

a timely manner and to provide additional time for EPA Regions to prepare for their duties as the 

Federal permitting authority, including the development of additional permitting tools, we have 

extended the applicability date of the rule for true minor sources for an additional 18 months for 

a total applicability delay of 36 months from the effective date of the final rule. In addition, 

sources eligible to seek coverage under a general permit will be subject to that general permit 4 

months after the general permit is effective (6 months after the general permit is published) 

unless the source opts to apply for a site-specific permit at the time the source had to apply for 

that general permit. 

Therefore and based on these revisions, we are reducing the permitting burden and cost for both 

the regulated community and the agency. Under the revised provisions, no permits will be 

required for new and modified true minor sources during the initial 36 months after the effective 

date of the rule, unless a general permit is available before the 36 month applicability date for the 

source category for which the source owner is seeking a permit. Sources will still be required to 

register, as in the previous version of the rule, within the first 18 months after the minor NSR 

rule effective date or 90 days after the source begins operation, whichever is later. 

Reduction in Economic Impacts Based on Rule Revisions

In the EIA, we present a range of estimated costs and impacts for the first 3 years after the 

effective date of the rule. The “Lower Bound” costs in the EIA only include Monitoring, 

Recordkeeping and Reporting (MRR) costs, computed under the conservative assumption that all 

facilities choose source-specific permitting (cost and burden for the development and 

implementation of general permits is unknown at this time). Under the “Upper Bound” cost 

estimates some facilities are assumed to be subject to BACT. 

Previously, Lower Bound costs, which are based only on MRR costs, were estimated for the first 

three years after the effective date of the rule to total $22.9 million across all source categories. 

Under the revised provisions, costs for this initial three-year period would total $2.7 million. The 

$20.2 million reduction in costs over the initial three-year period is wholly owed to reduction in 

permitting burden for new and modified true minor sources during the second18-month interval 

of the current 36-month applicability delay after the effective date of the rule. 

Furthermore, previous Upper Bound costs during the first 3 years after the effective date of the 

rule, which include compliance costs for BACT controls for some facilities in addition to MRR 

costs, were estimated in the EIA to total $24.2 million. Under the revisions, the Upper Bound 
cost is $2.9 million. This reduction of $21.3 million is also wholly due to the reduction in 

permitting burden for new and modified true minor sources during the second 18-month interval 

of the current 36-month applicability delay after the effective date of the rule. 

Burden Estimates in Supporting Statement

Estimated Reduction in Burden for Affected Sources. As explained previously, no permits 

will be required for new and modified true minor sources during the initial 36 months after the 

effective date of the rule, unless a general permit is available before the 36 month applicability 

date for the source category for which the source owner is seeking a permit. Sources will still be 

required to register, as in the previous version of the rule, within the first 18 months after the 

minor NSR rule effective date or 90 days after the source begins operation, whichever is later. 

We estimate that the level of effort and cost to register under the rule and to apply for coverage 

under a general permit is similar. Therefore, the overall burden for all affected true minor 

sources is projected to decrease from $22.8 million to $2.7 million, a reduction of $20.1 million 

and about 1.8 million hours. The burden associated with affected true minor sources is projected 

to decrease from $20.4 million to $0.3 million. The burden for new true minor sources is 

projected to decrease from $18.1 million to $0.2 million. The burden for modified true minor 

sources is projected to decrease from $2.3 million to about $30 thousand. 

The overall hours burden for all affected true minor sources is projected to decrease from 2.1 

million hours to 0.2 million hours, a reduction of 1.8 million hours. New true minor sources 

account for 1.6 million of the reduction and modified true minor sources account for the 

remaining 0.2 million hours. 

Estimated Reduction in Agency Burden: Similarly, the administrative burden to the Agency is 

projected to be lower under the revised provisions. Assuming all new and modified true minor 

sources are required to either register or apply for coverage under a general permit during the 

first 36 months following the rule’s effective date, the Agency overall burden is projected to 

decrease from $17.1 million to $6.9 million, a reduction of $10.2 million. In terms of hours, the 

Agency burden falls from 162,470 hours to 76,550 hours, a reduction of approximately 85,900 

hours. This decrease is wholly owed to not requiring sources to seek site-specific permits for true 

minor sources during the second 18-month interval of the current 36-month applicability delay 

after the effective date of the rule. The burden associated with true minor sources is projected to 

decrease from $11.0 million to $0.8 million, a reduction of $10.2 million. 

These estimates, however, do not include the Agency cost burden for development and 

implementation of new general permits as those costs are unknown at this time. 
Economic Impact Analysis for the Review of 

New Sources and Modifications in Indian 

Country 

Final Report 
EPA-452/R-11-002 

January 2011 

Economic Impact Analysis for the Review of New Sources and Modifications in Indian Country 

Final Report 

By: 

Lillian Bradley 

U.S. Environmental Protection Agency 

Air Economics Group 

Research Triangle Park, North Carolina 

Prepared for: 

U.S. Environmental Protection Agency 

Air Economics Group 

Research Triangle Park, North Carolina 

Contract No. EP-D-06-003 

Assignment No. 4-77 

U.S. Environmental Protection Agency 

Office of Air Quality Planning and Standards 

Health and Environmental Impacts Division 

Air Economics Group 

Research Triangle Park, North Carolina 
iii 

ACRONYMS AND ABBREVIATIONS 

Acronym or 

Abbreviation Definition 

AIAN American Indian or Alaska Native 

BACT Best Available Control Technology 

CBP County Business Patterns 

CFR Code of Federal Regulations 

CO Carbon Monoxide 

CSR Cost-to-Sales Ratio 

ECHO EPA Enforcement and Compliance History Online database 

EIA Economic Impact Analysis 

EPA Environmental Protection Agency 

HP Horsepower 

ICR Information Collection Request 

IRF Information Request Form Sent by OAQPS to EPA Regions 

MMBTU/hr Million British Thermal Units per hour 

MRR Monitoring, Recordkeeping, and Reporting 

NA NSR Non-Attainment New Source Review 

NAAQS National Ambient Air Quality Standards under the Clean Air Act 

NAICS North American Industry Classification System 

NEI National Emissions Inventory 

NOx Nitrous Oxides 

NSR New Source Review 

OAQPS EPA Office of Air Quality Planning and Standards 

PM Particulate Matter 

PM10 Particulate Matter, 10 microns or smaller 

PSD Prevention of Significant Deterioration 

RFA Regulatory Flexibility Act 

SBA Small Business Administration 

SBREFA Small Business Regulatory Enforcement Fairness Act 

SISNOSE Significant Impact to a Substantial Number of Small Entities 

SOx Sulfur Oxides 

SUSB Statistics of United States Business (U.S. Census Bureau) 

TAC Total Annualized Costs 

TPY Tons per Year 

VOC Volatile Organic Compounds 
v 

CONTENTS 

Section Page

Executive Summary .............................................................................................................ES-1 

1 Introduction ................................................................................................................... 1-1

1.1 Definitions ........................................................................................................... 1-1

1.2 EPA Region Groups ............................................................................................ 1-4

1.3 Organization of the Economic Impact Analysis Report ...................................... 1-5

2 Profile of Baseline Conditions ...................................................................................... 2-1

2.1 Data Availability and Uncertainties and Limitations .......................................... 2-1

2.2 Major and Synthetic Minor Sources .................................................................... 2-1

2.2.1 Data on Existing Major and Synthetic Minor Sources (2009) ................. 2-1

2.2.2 Methodology for Projecting Major Sources Expected to Exist in 

2010.......................................................................................................... 2-2

2.2.3 Methodology for Projecting New Major Sources Expected During 

the First 6 Years after Promulgation ........................................................ 2-5

2.2.4 Methodology for Projecting Synthetic Minor Sources Expected to 

Exist in 2010 ............................................................................................ 2-7

2.2.5 Methodology for Projecting New Synthetic Minor Sources 

Expected During the First 6 Years after Promulgation ............................ 2-8

2.3 Minor Stationary Sources, (or True Minor Sources) ........................................... 2-9

2.3.1 Methodology for Estimating Existing Minor Sources (2009) ................. 2-9

2.3.2 Methodology for Projecting New Minor Sources .................................. 2-10

3 Cost Analysis ................................................................................................................ 3-1

3.1 General Approach for Estimating Compliance Costs for New Minor 

Sources ................................................................................................................. 3-1

3.2 Costs for Major Sources ...................................................................................... 3-6

3.3 Agency Costs ....................................................................................................... 3-8

4 Economic Impact Analysis Methods and Results ......................................................... 4-1

4.1 Impacts on New Minor Sources, Minor Modifications, and New Synthetic 

Minor Sources ...................................................................................................... 4-1

4.2 Impacts on Major Sources ................................................................................... 4-5

4.3 Impacts on New Synthetic Minor Sources .......................................................... 4-6

4.4 Impacts on Existing True Minor and Existing Synthetic Minor Sources ............ 4-6

4.5 Small Entity Impact Analysis .............................................................................. 4-6

5 References .....................................................................................................................R-1
vi 

Appendixes 

A: Method for Estimating Existing True Minor Sources and Projecting New True 

Minor Sources .............................................................................................................. A-1

B: Estimated Control Costs for Affected Major and Minor Sources in Indian 

Country .........................................................................................................................B-1 
vii 

LIST OF TABLES 

Number Page

2-1. Estimated Number of Existing Major Sources in Indian Country, by EPA 

Region Groups (2009) .................................................................................................. 2-3

2-2. Projected Number of Existing Major Sources in Indian Country, by EPA Region 

Groups (2010) ............................................................................................................... 2-4

2-3. Projected Number of New Major Sources in Indian Country, by EPA Region 

Groups, 6-Year Period (2011–2016) ............................................................................ 2-6

2-4. Number of Existing Synthetic Minor Sources in Indian Country, by Region 

Groups (2009) ............................................................................................................... 2-7

2-5. Projected Number of Existing Synthetic Minor Sources in Indian Country, by 

Region Groups (2010) .................................................................................................. 2-8

2-6. Projected Number of New Synthetic Minor Sources in Indian Country, by 

Region Groups, First 6 Years (2011–2016) .................................................................. 2-9

2-7. Estimated and Reported Existing Minor Sources in Indian Country (2009) .............. 2-12

2-8. Estimated and Reported Existing Minor Sources in Indian Country (2010) .............. 2-14

2-9. Projected New Minor Sources in Indian Country, First 6 Years (2011–2016) .......... 2-17

3-1. Estimated National Total Annualized Control Costs by Source Type, First Year ....... 3-3

3-2. Estimated National Total Annualized Control Costs by Source Type, Second 

Year ............................................................................................................................... 3-3

3-3. Estimated National Total Annualized Control Costs by Source Type, Years 3 

through 6 (103

 $2008) ................................................................................................... 3-4

3-4. Estimated Lower-Bound National Total Annualized (MRR) Costs, First Year 

(103

 $2008) ................................................................................................................... 3-4

3-5. Estimated Lower-Bound National Total Annualized (MRR) Costs, Second Year 

(103 $2008) ................................................................................................................... 3-5

3-6. Estimated Lower-Bound National Total Annualized (MRR) Costs, Years 3 

through 6 (103

 $2008) ................................................................................................... 3-5

3-7. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs, 

First Year (103 $2008) .................................................................................................. 3-6

3-8. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs, 

Second Year (103 $2008) .............................................................................................. 3-7

3-9. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs, 

Years 3 through 6 (103 $2008) ...................................................................................... 3-7

3-10. Costs for New Major Sources in Nonattainment Areas (103 $2008) ............................ 3-7

3-11. Summary of National Costs, Including Agency Costs (106 $2008) ............................. 3-9

4-1. Lower-Bound Cost-to-Sales Ratios (MRR Costs Only), for Minor Sources, 

Minor Modifications to Existing Major and Minor Sources, and New Synthetic 

Minor Sources, by Industry Sector ............................................................................... 4-3
viii 

4-2. Upper-Bound Cost-to-Sales Ratios, for Minor Sources, Minor Modifications to 

Existing Major and Minor Sources, and New Synthetic Minor Sources, BACT 

and MRR Costs, by Industry Sector ............................................................................. 4-4

4-3. Projected Numbers of New and Modified Sources Owned by Small Entities, 

2011–2016, by Industry Sector ..................................................................................... 4-7

4-4. Lower-Bound Small Business Impacts for New Minor Sources, Minor 

Modifications at Existing Major and Minor Sources, and New Synthetic Minor 

Sources, MRR Costs Only, by Industry Sector ............................................................ 4-9

4-5. Upper-Bound Small Business Impacts for New Minor Sources, Minor 

Modifications at Existing Major and Minor Sources, and New Synthetic Minor 

Sources, BACT and MRR Costs, by Industry Sector ................................................. 4-10
ES-1 

EXECUTIVE SUMMARY 

The Review of New Sources and Modifications in Indian Country (hereafter referred to 

as the rule) establishes nationally applicable regulations to implement a permitting program to 

regulate the construction and modification of stationary sources of air pollution and to allow 

certain new and existing stationary sources to voluntarily accept federally enforceable emission 

limits to avoid major source regulations. The rule establishes procedures and terms under which 

the Administrator will issue permits for new minor source facilities (new plants that are minor 

sources, minor modifications to existing sources, and creation of synthetic minor sources by 

voluntarily accepting emissions limitations) as well as for minor modifications at major sources. 

In addition, the rule establishes procedures for permitting new major sources and major 

modifications in nonattainment areas in Indian Country. The U.S. Environmental Protection 

Agency (EPA) currently issues preconstruction permits in Indian Country for major sources and 

major modifications in attainment and unclassifiable areas under the Prevention of Significant 

Deterioration (PSD) regulations at 40 CFR Part 52.21. EPA has also issued preconstruction 

permits in Indian Country for major sources and major modifications in nonattainment areas on a 

case-by-case basis. Thus, the rule establishes a regulatory mechanism for permitting new major 

sources (new facilities) and major modifications at existing facilities in nonattainment areas in 

Indian Country. Existing minor source facilities in Indian Country at promulgation (an estimated 

32,900 facilities) will be required to register but not to undertake any other compliance activities. 

Existing synthetic minor facilities (an estimated 79 facilities at promulgation) are expected to be 

required to acquire new permits. 

EPA projected the number of new sources in Indian Country during the 6-year period 

following rule promulgation, based on projected population growth rates in Indian Country. 

These estimates were then revised based on information from EPA Regions. During the first 6 

years following promulgation of the rule, EPA projects that there will be 110 new major sources 

in Indian Country, of which 5 will be in nonattainment areas; 48 new synthetic minor sources; 

7,606 new true minor sources; one major modification to an existing major source; 12 minor 

modifications to existing major sources; and 984 minor modifications to minor sources. 

EPA estimated a range of costs of compliance for the rule, with a lower-bound estimate 

of only permitting, monitoring, recordkeeping, and reporting (MRR) costs and the upper-bound 

estimate including both emissions control costs and MRR costs. 

All new sources will be required to undertake permitting and MRR activities as a result 

of the rule. In addition, some facilities will be required to install and operate emissions control 
ES-2 

equipment, as determined based on a case-by-case review of control technologies. EPA has 

estimated upper-bound costs as the sum of MRR costs and Best Achievable Control Technology 

(BACT) control costs, recognizing that this upper bound overstates control costs because very 

few facilities will be required to install BACT. 

Existing minor sources are projected to incur a total of $2.04 million to complete 

registration during the first year after the effective date of the rule. Existing synthetic minors are 

estimated to incur a total of $48,800 to acquire new permits during the same time period. EPA 

has delayed implementation of the rule for new and modified minor sources until 18 months after 

the effective date of the rule. During the first 18 months following the rule’s effective date, these 

new sources will be required to register but not to be permitted. During this period, facilities will 

incur costs similar to existing minor sources ($62/source). 

Table ES-1 presents national total annualized costs for new minor sources, minor 

modifications, and new synthetic minor sources, including lower-bound estimates (MRR costs 

only) and upper-bound estimates (MRR costs plus BACT emissions control costs) for the first 

year following rule promulgation, the second year following rule promulgation, and for years 3 

through 6 following promulgation. 

Table ES-1. Summary of National Total Annualized Costs for Minor Sources and Minor 

Modifications, by Time Period (106

 $2008) 

Time Period 

Number of Affected 

Sources 

Lower-Bound Estimate 

(MRR Costs Only) 

Upper-Bound Estimate 

(MRR Costs Plus 

Emissions Control Costs) 

First-Year Costs 34,412 $2.3 $2.4 

Second-Year Costs 1,442 $6.9 $7.4 

Costs for Years 3 through 6 1,442 $13.7 $14.4 

EPA estimates that new major sources in nonattainment areas will incur total annualized 

costs of $40,000. However, EPA does not believe these costs are incremental, because new 

major sources in nonattainment areas would have incurred similar costs to comply with sourcespecific Federal Implementation Plans (FIPs) in the absence of the rule. The rule represents an 

administrative change but no increase in costs. Thus, EPA does not estimate incremental impacts 

for new major sources due to the rule. 

In addition to the total annualized costs incurred by new sources, EPA estimates that the 

Agency will incur administrative costs of $17.1 million over the first 3 years following rule 

promulgation, an average of $5.7 million per year. 
ES-3 

Thus, during the first year following promulgation, industry is projected to incur between 

$2.3 and $2.4 million; including annual Agency burden, the national annualized cost is estimated 

to be between $8.0 and $8.1 million. Because implementation of the rule was delayed 18 months 

from the rule’s effective date for new and modified minor sources, Year 2 includes 6 months 

during which new and modified minor sources need only register and 6 months during which 

they will need to obtain a permit. Costs for the second year following rule promulgation total 

between $6.9 million and $7.4 million. Including annual Agency burden, the national annualized 

cost is estimated to be between $12.6 million and $13.1 million. During subsequent years, 

estimated total annualized incremental costs for new sources in the industry (excluding existing 

minor sources, existing synthetic minor sources, and new and modified major sources) range 

from $13.7 million to $14.4 million. Including annual average Agency burden, estimated total 

annualized costs for the rule range from $19.4 million to $20.1 million. 

After estimating costs of compliance, EPA conducted a screening assessment that 

compared the total annualized costs (using the per-facility costs for the period beginning 18 

months following rule promulgation) for facilities in affected sectors to typical facility revenues 

in affected sectors. At the lower bound, MRR costs only, costs are below 1% of sales for all 

sectors except automobile body refinishers (whose costs are less than 1.5% of sales). At the 

upper bound, BACT plus MRR costs, costs are projected to be less than 3% of sales for all 

sectors and less than 1% of sales for all sectors except auto body refinishers, concrete batching 

plants, sand and gravel mines, sand and shot blasting operations, solid waste landfills, and wood 

kitchen cabinet manufacturers. EPA estimates there may be as many as 74 new minor sources or 

minor modifications at existing minor sources in these sectors in the first 6 years after rule 

promulgation but only a very small share of them would be required to install BACT controls, so 

very few affected new and modified minor source facilities would incur the upper-bound costs. 

EPA estimated the number of new sources owned by small businesses in each sector, 

based on the share of existing sources in Indian Country owned by small businesses; in all, EPA 

estimates that 1,730 new minor sources, minor modifications, and new synthetic minor sources 

will be owned by small businesses during the first 6 years following rule promulgation. EPA’s 

screening assessment compared the costs of compliance for these facilities to typical sales for 

firms with fewer than 500 employees. Table ES-2 shows EPA’s estimated number of new and 

modified sources owned by small businesses, during the 6 years following rule promulgation. 

At the lower bound, for MRR costs only, only small businesses in the automobile body 

refinishing sector are estimated to incur costs greater than 1% and less than 1.5%. EPA estimates 

that there may be 10 new or modified sources owned by small businesses in this sector during 

the 6 years following promulgation of the rule. At the upper bound, BACT plus MRR costs, 
ES-4 

Table ES-2. Projected Number of New and Modified Sources Owned by Small Businesses 

Source Type 

Projected Number of New and Modified Sources Owned 

by Small Businesses 

New Minor Sources 1,521 

Modified Minor Sources 197 

Synthetic Minor Sources 10 

Minor Modifications to Major Sources 2 

Total 1,730 

several sectors (auto body refinishers, concrete batching plants, sand and gravel mining, sand and 

shot blasting, solid waste landfills, and sawmills) have costs between 1% and 3% of sales. EPA 

estimates that there will be at most 20 new minor sources or minor modifications owned by small 

businesses in these categories in the period 2011 to 2016. In addition, EPA anticipates that only a 

very small share of new or modified minor sources will incur upper-bound costs as a result of the 

rule. Thus, EPA believes that the rule will not result in significant impacts to a substantial 

number of small entities. 
1-1 

SECTION 1 

INTRODUCTION 

The Review of New Sources and Modifications in Indian Country (hereafter referred to 

as the rule) establishes nationally applicable regulations to implement a permitting program to 

regulate the construction and modification of stationary sources of air pollution and to allow 

certain new and existing stationary sources to voluntarily accept federally enforceable emission 

limits to avoid major source regulations. The rule establishes procedures and terms under which 

the Administrator will issue permits for new minor source facilities (new plants that are minor 

sources, minor modifications to existing sources, and creation of synthetic minor sources by 

voluntarily accepting emissions limitations). In addition, the rule establishes procedures for 

permitting new major sources and major modifications in nonattainment areas in Indian Country. 

The U.S. Environmental Protection Agency (EPA) currently issues preconstruction permits in 

Indian Country for major sources and major modifications in attainment and unclassifiable areas 

under the Prevention of Significant Deterioration (PSD) regulations at 40 CFR Part 52.21. EPA 

has also issued preconstruction permits in Indian Country for major sources and major 

modifications in nonattainment areas on a case-by-case basis. Thus, the rule does not impose any 

incremental emissions control requirements on existing major sources in nonattainment areas. It 

does, however, establish a regulatory mechanism for permitting new major sources (new 

facilities and major modifications at existing facilities) in nonattainment areas in Indian Country. 

Existing operations at existing minor and major source facilities in Indian Country will not be 

affected by the rule. 

1.1 Definitions 

To clarify terms used in this report, EPA provides the following definitions, which are 

found in their entirety in Appendix S to 40 CFR Ch I, Part 51(pp. 494–516 of the 7-1-09 Edition 

of the CFR):

Major stationary source means: 

(a) Any stationary source of air pollutants which emits, or has the potential to emit, 100 tons per 

year or more of any pollutant subject to regulation under the Act, except that lower emissions 

thresholds shall apply in areas subject to subpart 2, subpart 3, or subpart 4 of part D, title I of the 

Act, according to the thresholds listed in Appendix S to Part 51, below. 

(1) 50 tons per year of volatile organic compounds in any serious ozone nonattainment 

area. 

(2) 50 tons per year of volatile organic compounds in an area within an ozone transport 

region, except for any severe or extreme ozone nonattainment area. 
1-2 

(3) 25 tons per year of volatile organic compounds in any severe ozone nonattainment 

area. 

(4) 10 tons per year of volatile organic compounds in any extreme ozone nonattainment 

area. 

(5) 50 tons per year of carbon monoxide in any serious nonattainment area for carbon 

monoxide, where stationary sources contribute significantly to carbon monoxide 

levels in the area (as determined under rules issued by the Administrator). 

(6) 70 tons per year of PM10 in any serious nonattainment area for PM10; 

(b) For the purposes of applying the requirements of paragraph IV. H of Appendix S of Part 51 

to stationary sources of nitrogen oxides located in an ozone nonattainment area or in an ozone 

transport region, any stationary source which emits, or has the potential to emit, 100 tons per 

year or more of nitrogen oxides emissions, except that the emission thresholds in paragraphs 

II.A.4(i)(b)(1) through (6) of this Ruling apply in areas subject to subpart 2 of part D, title I of 

the Act. 

(1) 100 tons per year or more of nitrogen oxides in any ozone nonattainment area 

classified as marginal or moderate. 

(2) 100 tons per year or more of nitrogen oxides in any ozone nonattainment area 

classified as a transitional, submarginal, or incomplete or no data area, when such 

area is located in an ozone transport region. 

(3) 100 tons per year or more of nitrogen oxides in any area designated under section 

107(d) of the Act as attainment or unclassifiable for ozone that is located in an ozone 

transport region. 

(4) 50 tons per year or more of nitrogen oxides in any serious nonattainment area for 

ozone. 

(5) 25 tons per year or more of nitrogen oxides in any severe nonattainment area for 

ozone. 

(6) 10 tons per year or more of nitrogen oxides in any extreme nonattainment area for 

ozone; or 

Any physical change that would occur at a stationary source not qualifying under paragraph 

II.A.4(i)(a) or (b) of this Ruling as a major stationary source, if the change would constitute a 

major stationary source by itself. A major stationary source that is major for volatile organic 

compounds or nitrogen oxides is major for ozone. Fugitive emissions are generally not included 

in determinations of whether a stationary source is a major source, although Appendix S to Part 

51 lists several categories of stationary sources for which the fugitive emissions of a stationary 

source shall be included in determining whether the source is major. 

Major modification means any physical change in or change in the method of operation of a 

major stationary source that would result in: 
1-3 

1. A significant emissions increase of a regulated New Source Review (NSR) pollutant 

(as defined in paragraph II.A.31 of Appendix S of Part 51); and 

2. A significant net emissions increase of that pollutant from the major stationary 

source. 

Any significant emissions increase (as defined in paragraph II.A.23 of this Ruling) from any 

emissions units or net emissions increase (as defined in paragraph II.A.6 of this Ruling) at a 

major stationary source that is significant for volatile organic compounds shall be considered 

significant for ozone. Appendix S of Part 51 lists several activities that would not be considered 

a physical change or change in the method of operation of the facility; specifies that any 

significant net increase in nitrogen oxides is considered significant for ozone, and that any 

physical change in or change in the method of operation of, a major stationary source of volatile 

organic compounds (VOCs) that results in any increase in emissions of VOCs from any discrete 

operation, emissions unit, or other pollutant emitting activity at the source shall be considered a 

significant net emissions increase and a major modification for ozone, if the major stationary 

source is located in an extreme ozone nonattainment area that is subject to subpart 2, part D, title 

I of the Act. Appendix S also notes that fugitive emissions are not included unless the source is 

in one of the specific categories listed in Appendix S’s definition of major source. 

A minor stationary source (often referred to simply as a minor source or true minor source) 

generally means a source that emits or has the potential to emit regulated NSR pollutants in 

amounts that are less than the major stationary source levels. However, for purposes of this rule, 

a minor source is a source that emits or has the potential to emit regulated NSR pollutants in 

amounts that are less than the major stationary source levels but has potential emissions higher 

than the minor NSR thresholds. For the purposes of this definition, the potential to emit includes 

fugitive emissions, to the extent that they are quantifiable, only if the source is in one of the 

source categories listed in 40 CFR 52.21(b)(1)(iii). The term “minor stationary source” applies 

independently to each regulated NSR pollutant that the source has the potential to emit and 

excludes any emissions units and activities that have been exempted from regulation according 

to final 40 CFR 49.153(c). 

Synthetic minor source means a source that has the potential to emit regulated NSR pollutants 

in amounts that are at or above the major source thresholds in 40 CFR 49.167 or 52.21, as 

applicable, but that has taken an enforceable restriction so that its potential to emit (PTE) is less 

than the major source thresholds and, for purposes of this rule, above the minor NSR thresholds 

as well.

Minor modification. For the purposes of the minor NSR program, a minor modification is 

defined at 40 CFR 49.152(d) as any physical or operational change at a stationary source that 

would cause an increase in the allowable emissions of the affected emissions units above the 

minor NSR thresholds for any regulated NSR pollutant or that would cause the emission of any 

regulated NSR pollutant not previously emitted. For the purposes of this definition, fugitive 
1-4 

emissions, to the extent that they are quantifiable, are included only if the source is in one of the 

source categories listed in 40 CFR 52.21(b)(1)(iii). The following exemptions apply: 

• A physical or operational change does not include routine maintenance, repair, or 

replacement. 

• An increase in the hours of operation or in the production rate is not considered an 

operational change unless such change is prohibited under any permit condition that 

is enforceable as a practical matter. 

• A change in ownership at a stationary source is not considered a modification. 

Major source of hazardous air pollutants is any stationary source or group of contiguous 

sources under common control that emits or has the potential to emit considering control, in the 

aggregate, 10 tons per year or more of any hazardous air pollutant (Sec. 112(b)(1) of the Clean 

Air Act [CAA]) or 25 tons per year or more of any combination of hazardous air pollutants. 

Area source of hazardous air pollutants is any stationary source or group of contiguous 

sources that is not a major source of hazardous air pollutants and emits or has the potential to 

emit any hazardous air pollutant or combination of hazardous air pollutants above the threshold

level. 

1.2 EPA Region Groups 

EPA conducted its analysis at the EPA Region level and then grouped the EPA Regions 

to reflect Regions with similar source types. EPA Region 3 contains no federally recognized 

Tribes, so it is omitted from the analysis. EPA grouped the Regions as follows: Regions 1, 2, and 

4; Regions 5, 7, and 10; and Regions 6, 8, and 9. Because the analysis is conducted for the 

continental United States only, the EPA Regions in the analysis include the following states: 

Region 1: Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont 

Region 2: New Jersey and New York 

Region 4: Alabama, Florida, Georgia, Kentucky, Mississippi, North Carolina, South Carolina, 

and Tennessee 

Region 5: Illinois, Indiana, Michigan, Minnesota, Ohio, and Wisconsin 

Region 6: Arkansas, Louisiana, New Mexico, Oklahoma, and Texas 

Region 7: Iowa, Kansas, Missouri, and Nebraska 

Region 8: Colorado, Montana, North Dakota, South Dakota, Utah, and Wyoming 

Region 9: Arizona, California, and Nevada 

Region 10: Idaho, Oregon, and Washington 
1-5 

1.3 Organization of the Economic Impact Analysis Report 

The analysis is organized as follows. Section 2 provides a profile of the baseline 

conditions for the analysis. In Section 3, the Agency estimates the costs and burdens that would 

typically result from implementing the rule. Section 4 describes the underlying assumptions and 

computations EPA made in estimating the economic impacts of the rule, including estimating the 

number of affected small entities and examining the rule’s possible impact on these entities. 
2-1 

SECTION 2 

PROFILE OF BASELINE CONDITIONS 

Promulgation of the Review of New Sources and Modifications in Indian Country will 

result in regulation of air emissions from new and modified minor sources, minor modifications 

to existing major sources, and sources accepting emissions limitations to become synthetic minor 

sources. In addition, the rule establishes the nonattainment NSR program for major sources and 

major modifications to sources in Indian Country. In addition, the minor NSR portion of the rule 

will require the registration of existing minor sources. This section provides a profile of the 

baseline conditions and describes the underlying assumptions and computations that were made 

in support of the analysis. 

2.1 Data Availability and Uncertainties and Limitations 

A first step in analyzing the impacts of the rule is characterizing the baseline conditions 

in the absence of the rule (year 2009). Characterizing the baseline requires estimating the number 

of existing major and minor sources in Indian Country in 2009 and projecting the number of new 

sources that will be created in Indian Country during the period 2011 to 2016. Data on major 

sources in Indian Country are publicly available because major sources are required to obtain 

Title V permits. However, data on minor sources are very limited because existing minor sources 

are not required to have permits. 

The analysis presented here is for the continental United States; thus, it does not include 

data for Alaska Native Villages or Hawaii. Furthermore, the nationwide results are presented 

geographically by groups of EPA Regions to reflect those Regions that have similar source 

categories, as described in Section 1. 

2.2 Major and Synthetic Minor Sources 

This section describes the data used to estimate the number and type of existing major 

and synthetic minor sources in Indian Country, and the methods and data used to project the 

number of new major and synthetic minor sources over the first 6 years following rule 

promulgation (i.e., 6-year period, 2011 through 2016).

2.2.1 Data on Existing Major and Synthetic Minor Sources (2009) 

We obtained data from EPA’s Enforcement and Compliance History Online (ECHO) 

database (http://www.epa-echo.gov/echo/) in May 2009, as well as data from various EPA 

Regions on existing major sources in Indian Country. However, the data from the ECHO 
2-2 

database were reviewed and amended by Tribal experts in the EPA Regions based on the 

information gathered by them. For example, several Regions identified sources not listed in 

ECHO or identified sources that had shut down. The revised data for existing major sources are 

shown in Table 2-1, while the data for existing synthetic minor sources are shown later in this 

section in Table 2-4. These data reflect actual data for the year 2009; thus, these values are not 

estimates. 

In summary, there were 157 existing major sources and 64 existing synthetic minor 

sources in Indian Country in 2009. 

2.2.2 Methodology for Projecting Major Sources Expected to Exist in 2010 

The number of existing sources in the previous section was used to estimate the number 

of major sources that would exist in late 2010. We present our projection methods for new major 

sources first; then we describe methods for projecting new synthetic minor sources. Although the 

data sources and projection methodologies are similar, major source and synthetic minor sources 

are regulated differently under the rule. 

1. We assumed that the number of major sources in Indian Country in each Region 

would grow at the same rate as the American Indian and Alaska Native (AIAN) 

population in each Region. 

2. Estimated AIAN growth rates for each state were calculated based on Census 

projections of the state-level AIAN population for the period 2000 to 2015 (U.S. 

Census Bureau, 1996), and we assumed the annual growth rates remain valid through 

2016. AIAN growth rates for each EPA Region were then computed as the 

population-weighted average of the state growth rates. This approach assumes that all 

sectors with major sources will grow at the same rate, and that all new major sources 

and major modifications will occur in the same sectors as the existing major sources. 

3. This basic approach was augmented with information from EPA Regions about the 

expected number of new sources. 

Table 2-2 shows the projected number of major sources in Indian Country in 2010, by 

EPA Region group. Overall, we estimate that there will be 179 existing major sources in Indian 

Country in 2010. 
2-3 

Table 2-1. Estimated Number of Existing Major Sources in Indian Country, by EPA 

Region Groups (2009)a 

 EPA Region Groups 

Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total 

Wood Furniture Manufacturing 1 0 0 1 

Crude Petroleum and Natural Gas Extraction 0 0 101 101 

Natural Gas Liquid Extraction 0 0 6 6 

Power Generation 0 0 0 0 

Fossil Fuel Electric Power Generation 0 0 4 4 

Natural Gas Distribution 0 0 1 1 

Fabric Coating Mills 0 0 1 1 

Sawmills 0 6 2 8 

Hardwood Veneer and Plywood Manufacturing 0 1 0 1 

Softwood Veneer and Plywood Manufacturing 0 1 0 1 

Wood Window and Door Manufacturing 0 1 0 1 

All Other Miscellaneous Wood Product Manufacturing 0 1 0 1 

All Other Basic Inorganic Chemical Manufacturing 0 0 1 1 

Plastics Plumbing Fixture Manufacturing 0 1 0 1 

Pipeline Transportation of Natural Gas 0 3 5 8 

Solid Waste Landfill 0 0 3 3 

Aluminum Production 0 0 1 1 

Non-fossil Fuel Power Generation 0 0 2 2 

Coal Mining 0 0 2 2 

Natural Gas Compressor Station 0 0 7 7 

Casino/Hotel 0 3 1 4 

Other (Boilers) 0 1 1 2 

Total Existing Sources 1 18 138 157 

a

 Estimates and projections are presented by EPA Region groupings, which are defined geographically. Note that 

EPA Region 3 has no federally recognized Indian Tribes and is thus omitted from the tables. 
2-4 

Table 2-2. Projected Number of Existing Major Sources in Indian Country, by EPA Region 

Groups (2010)a 

 EPA Region Groups 

Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total 

Wood Furniture Manufacturing 1 0 0 1 

Crude Petroleum and Natural Gas Extraction 0 0 119 119 

Natural Gas Liquid Extraction 0 0 6 6 

Power Generation 0 0 2 2 

Fossil Fuel Electric Power Generation 0 0 4 4 

Natural Gas Distribution 0 0 1 1 

Fabric Coating Mills 0 0 1 1 

Sawmills 0 6 2 8 

Hardwood Veneer and Plywood Manufacturing 0 1 0 1 

Softwood Veneer and Plywood Manufacturing 0 1 0 1 

Wood Window and Door Manufacturing 0 1 0 1 

All Other Miscellaneous Wood Product Manufacturing 0 1 0 1 

All Other Basic Inorganic Chemical Manufacturing 0 0 1 1 

Plastics Plumbing Fixture Manufacturing 0 1 0 1 

Pipeline Transportation of Natural Gas 0 3 5 8 

Solid Waste Landfill 0 0 3 3 

Aluminum Production 0 0 1 1 

Non-fossil Fuel Power Generation 0 0 2 2 

Coal Mining 0 0 2 2 

Natural Gas Compressor Station 0 0 9 9 

Casino/Hotel 0 3 1 4 

Other (Boilers) 0 1 1 2 

Total Existing Major Sources 1 18 160 179 

Growth rate based on U.S. Census Bureau. Projected State Populations, by Sex, Race, and Hispanic Origin, 1995–

2025. http://www.census.gov/population/projections/state/stpjrace.txt. 
2-5 

2.2.3 Methodology for Projecting New Major Sources Expected During the First 6 Years 

after Promulgation 

The same method was used to project the number of major sources at the end of the 

6-year period. 

1. We assumed that the number of major sources in Indian Country in each Region 

would grow at the same rate as the AIAN population in each Region. 

2. We estimated AIAN growth rates for each state based on Census projections of statelevel AIAN population for the period of 2000 to 2015 (U.S. Census Bureau, 1996). 

AIAN growth rates for each EPA Region were then computed as the populationweighted average of the state growth rates. Major sources in each Region were 

projected by applying the Region-specific AIAN growth rate to the numbers of major 

sources estimated to exist in 2010. Then the number of new major sources was 

computed by subtracting the projected number of major sources at the beginning of 

the 6-year period from the estimated sources at the end of the period. This approach 

assumes that all sectors with major sources will grow at the same rate, and that all 

new major sources and major modifications will occur in the same sectors as the 

existing major sources. We project that there will be 110 new major sources in Indian 

Country during the period 2011 to 2016, as shown in Table 2-3. 

3. To identify the number of new major sources in nonattainment areas, we assumed that 

the same percentage of new sources would be in nonattainment areas (approximately 

5%) as were reported in the ECHO database in 2009. Thus, we estimate that only 5 of 

the 110 new major sources in Indian Country would be in a nonattainment area. 

4. Based on experience with other rulemakings, we estimated at most one of the major 

sources in nonattainment areas would choose to make a major modification during the 

6-year period. 

5. Based on experience with other rulemakings, we assumed that two major sources per 

year will choose to make a minor modification during the 6-year period, for a total of 

12 minor modifications to major facilities. 
2-6 

Table 2-3. Projected Number of New Major Sources in Indian Country, by EPA Region 

Groups, 6-Year Period (2011–2016) 

 EPA Region Groups 

Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total 

Wood Furniture Manufacturing 0 0 0 0 

Crude Petroleum and Natural Gas Extraction 0 0 108 108 

Natural Gas Liquid Extraction 0 0 1 1 

Power Generation 0 0 0 0 

Fossil Fuel Electric Power Generation 0 0 0 0 

Natural Gas Distribution 0 0 0 0 

Fabric Coating Mills 0 0 0 0 

Sawmills 0 1 0 1 

Hardwood Veneer and Plywood Manufacturing 0 0 0 0 

Softwood Veneer and Plywood Manufacturing 0 0 0 0 

Wood Window and Door Manufacturing 0 0 0 0 

All Other Miscellaneous Wood Product Manufacturing 0 0 0 0 

All Other Basic Inorganic Chemical Manufacturing 0 0 0 0 

Plastics Plumbing Fixture Manufacturing 0 0 0 0 

Pipeline Transportation of Natural Gas 0 0 0 0 

Solid Waste Landfill 0 0 0 0 

Aluminum Production 0 0 0 0 

Non-fossil Fuel Power Generation 0 0 0 0 

Coal Mining 0 0 0 0 

Natural Gas Compressor Station 0 0 0 0 

Casino/Hotel 0 0 0 0 

Other (Boilers) 0 0 0 0 

Total New Major Sources 0 1 109 110 

Growth rate based on U.S. Census Bureau. Projected State Populations, by Sex, Race, and Hispanic Origin, 1995–

2025. http://www.census.gov/population/projections/state/stpjrace.txt. 
2-7 

2.2.4 Methodology for Projecting Synthetic Minor Sources Expected to Exist in 2010 

The data on existing synthetic minor sources in 2009 (Table 2-4) was used to estimate the 

number of synthetic minor sources that would exist in late 2010 as follows: 

1. We assumed that the number of synthetic minor sources in Indian Country in each 

Region would grow at the same rate as the AIAN population in each Region. 

2. We estimated AIAN growth rates for each state based on Census projections of the 

state-level AIAN population for the period 2000 to 2015,1 and we assumed the annual 

AIAN growth rates remain valid through 2016. AIAN growth rates for each EPA 

Region were then computed as the population-weighted average of the state growth 

rates. This approach assumes that all sectors with synthetic minor sources will grow 

at the same rate, and that all new major modifications will occur in the same sectors 

as the existing synthetic minor sources. 

3. This basic approach was augmented with information from EPA Regions about the 

expected number of new sources. 

Table 2-4. Number of Existing Synthetic Minor Sources in Indian Country, by Region 

Groups (2009) 

 EPA Region Groups 

Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total 

Crude Petroleum and Natural Gas Extraction 0 0 33 33 

Sand and Gravel Mining 0 0 1 1 

All Other Nonmetallic Mineral Mining 0 0 1 1 

Hydroelectric Power Generation 0 2 0 2 

Sawmills 0 5 1 6 

Asphalt Paving Mixture and Block Manufacturing 0 2 0 2 

Casino/Hotel 0 0 1 1 

Softwood Veneer and Plywood Manufacturing 0 1 0 1 

Fiberglass Manufacturing 0 1 0 1 

Agricultural Post-harvest Chemicals 0 1 0 1 

Slaughterhouse 0 0 0 0 

Other (Boilers) 2 0 13 15 

Total 2 12 50 64 

Table 2-5 shows the projected number of synthetic minor sources in Indian Country in 

2010, by EPA Region group. Overall, we estimate that there will be 79 existing synthetic minor 

sources in Indian Country in 2010. 

 

1

 U.S. Census Bureau, Projected State Populations, by Sex, Race and Hispanic Origin, 1995–2025. 

http://www.census.gov/population/projections/state/stpjrace.txt. 
2-8 

Table 2-5. Projected Number of Existing Synthetic Minor Sources in Indian Country, by 

Region Groups (2010) 

 EPA Region Groups 

Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total 

Crude Petroleum and Natural Gas Extraction 0 0 34 34 

Sand and Gravel Mining 0 0 1 1 

All Other Nonmetallic Mineral Mining 0 0 1 1 

Hydroelectric Power Generation 0 2 0 2 

Sawmills 0 5 1 6 

Asphalt Paving Mixture and Block Manufacturing 0 4 0 4 

Casino/Hotel 0 0 1 1 

Softwood Veneer and Plywood Manufacturing 0 1 0 1 

Fiberglass Manufacturing 0 1 0 1 

Agricultural Post-harvest Chemicals 0 1 0 1 

Slaughterhouse 0 1 0 1 

Other (Boilers) 2 0 24 26 

Total 2 15 62 79 

Growth rate based on U.S. Census Bureau. Projected State Populations, by Sex, Race, and Hispanic Origin, 1995–

2025. http://www.census.gov/population/projections/state/stpjrace.txt. 

2.2.5 Methodology for Projecting New Synthetic Minor Sources Expected During the First 6 

Years after Promulgation 

The same method was used to project the number of synthetic minor sources at the end of 

the 6-year period. 

1. EPA assumed that the number of synthetic minor sources in Indian Country in each 

Region would grow at the same rate as the American Indian and AIAN population in 

each Region. 

2. We estimated AIAN growth rates for each state based on Census projections of the 

state-level AIAN population for the period 2000 to 2015, and assumed the annual 

growth rate remains valid through 2016. AIAN growth rates for each EPA Region 

were then computed as the population-weighted average of the state growth rates. 

Synthetic minor sources in each Region were projected by applying the Regionspecific AIAN growth rate to the numbers of major sources estimated to exist in 

2010. Then the number of new synthetic minor sources was computed by subtracting 

the projected number of sources at the beginning of the 6-year period from the 

estimated sources at the end of the period. This approach assumes that all sectors with 

synthetic minor sources will grow at the same rate, and that all new sources will occur 

in the same sectors as the existing synthetic minor sources. Our estimated numbers of 

synthetic minor sources were reviewed by the EPA Regions and revised according to 

their comments. We project that there will be 48 new synthetic minor sources during 
2-9 

the 6-year period. Table 2-6 presents the projected new synthetic minor sources 

during the period 2011 to 2016. 

Table 2-6. Projected Number of New Synthetic Minor Sources in Indian Country, by 

Region Groups, First 6 Years (2011–2016) 

 EPA Region Groups 

Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total 

Crude Petroleum and Natural Gas Extraction 0 0 12 12 

Sand and Gravel Mining 0 0 0 0 

All Other Nonmetallic Mineral Mining 0 0 0 0 

Hydroelectric Power Generation 0 0 0 0 

Sawmills 0 0 0 0 

Asphalt Paving Mixture and Block Manufacturing 0 0 0 0 

Casino/Hotel 0 0 0 0 

Softwood Veneer and Plywood Manufacturing 0 0 0 0 

Fiberglass Manufacturing 0 0 0 0 

Agricultural Post-harvest Chemicals 0 0 0 0 

Slaughterhouse 0 0 0 0 

Other (Boilers) 0 0 36 36 

Total 0 0 48 48 

Growth rate based on U.S. Census Bureau. Projected State Populations, by Sex, Race, and Hispanic Origin, 1995–

2025. http://www.census.gov/population/projections/state/stpjrace.txt. 

2.3 Minor Stationary Sources, (or True Minor Sources) 

The method for estimating the number of existing minor sources in Indian Country and 

projecting the number of new minor sources during the first 6 years after rule promulgation is 

more complex, because data on existing minor sources in Indian Country are limited. Appendix 

A illustrates the process for estimating existing new minor sources and then projecting the 

number of new minor sources. 

2.3.1 Methodology for Estimating Existing Minor Sources (2009)2

EPA’s methodology for estimating existing minor sources in 2009 used data from a 

variety of sources. 

 

2

 Existing minor source estimates are assumed to be valid for 2009. 
2-10 

1. EPA used all available information to identify the types of sources likely to be found 

in Indian Country, including 

– regional reports to the Office of Air Quality Planning and Standards (OAQPS) 

– National Emissions Inventory (NEI) categories identified in the proposal (North 

American Industry Classification System [NAICS] codes) 

– additional categories listed in the NEI (NAICS codes) 

– additional categories listed on the Information Request Forms (IRFs) sent to the 

Regions 

2. We estimated the share of income in each EPA Region that is associated with the 

AIAN geographical locations. EPA chose to use an income ratio to estimate the share 

of facilities in each NAICS on AIAN lands because income is a good proxy for 

economic activity. This is the same method that was used for the proposal economic 

impact analysis (EIA). The following relationship was used to calculate this income 

ratio: 

. ( Estimated income of the Region where AIAN is located )

( Income per capita forAIAN )* ( Population for each AIAN geographic area ) Income Ratio ∑=

3. We obtained data on the number of establishments for each affected NAICS from 

2002 Statistics of U.S. Businesses3 for each state. 

4. We grouped the data into EPA Regions. 

5. We estimated the number of sources in Indian Country in each Region and minor 

source NAICS code/source category using the following equation, based on each 

AIAN geographic area’s income ratio: 

 Number of Sources = (Income Ratio)*(Total Number of Establishments in Each Region). 

6. We then sent the estimated number of existing sources to the EPA Regions for 

review, and based on the information gathered by them, several Regions amended the 

information. 

2.3.2 Methodology for Projecting New Minor Sources 

The overall approach for projecting new minor sources, as described below, is similar to 

that used for projecting new major and synthetic minor sources. 

1. We assumed that the number of minor sources in Indian Country in each Region 

would grow at the same rate as the AIAN population in each Region. 

 

3

 U.S. Census Bureau. Statistics of U.S. Businesses, 2002. Data from all U.S. and Puerto Rico business 

establishments with paid employees (excludes certain source categories and most government employees). Data 

for establishments are presented by geographic area, 6-digit NAICS, and employment size class. 

http://www.census.gov/econ/susb/data/susb2002.html. 
2-11 

2. We estimated AIAN growth rates for each state based on Census projections of statelevel AIAN populations for the period of 2005 to 2015; we assumed the annual AIAN 

growth rates remain valid through 2016.4

3. We calculated AIAN growth rates for each EPA Region as the population-weighted 

average of the state growth rates. Minor sources in each Region were then projected 

by applying the Region-specific AIAN growth rate to the number of minor sources 

estimated/reported in 2010. This reflects the same assumptions underlying the major 

source and synthetic minor sources projections, that all sectors with minor sources 

will grow at the same rate as the AIAN population, and that all new minor sources 

will be in the same sectors as the existing minor sources. 

4. To project new minor sources during the first 6 years after rule promulgation, the 

estimated number of existing minor sources in 2010 was projected to grow at AIAN 

population growth rates for 6 years. New minor sources were estimated by 

subtracting projected minor sources at the beginning of the period from projected 

minor sources at the end of the period. Overall, we project that there will be 7,606 

new true minor sources in Indian Country in the 6 years after rule promulgation. 

5. To estimate the number of minor modifications to these sources subject to the rule, 

EPA assumed based on experience that 10% (3,289) of existing minor sources would 

choose to make changes to their facilities each year. However, it is anticipated that of 

these minor source process/operational modifications, only 5% will result in emission 

increases greater than the minor NSR threshold. We estimate that 984 minor 

modifications to minor sources will require permits during the first 6 years after 

promulgation. 

Table 2-7 presents the resulting estimated/reported minor sources for 2009, and Table 2-8 

presents the resulting estimated minor sources for 2010. In 2010, Regions 1, 2, and 4 are 

estimated to have approximately 300 existing true minor source facilities. Regions 5, 7, and 10 

are estimated to have approximately 800 true minors, and Regions 6, 8, and 9 are estimated to 

have approximately 31,800, for a total of approximately 32,900. 

 

4

 U.S. Census Bureau. Projected State Populations, by Sex, Race, and Hispanic Origin, 1995–2025. 

http://www.census.gov/population/projections/state/stpjrace.txt. 
2-12 

Table 2-7. Estimated and Reported Existing Minor Sources in Indian Country (2009) 

 EPA Region Groups 

Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total 

Logging 5 7 49 61 

Forestry Support Activities 0 1 19 20 

Oil and Natural Gas Wells 5 30 23,774 23,809 

Rock Mining Gravel 3 12 83 98 

Electric Power Generation 0 3 78 81 

Natural Gas Distribution 1 3 77 81 

Agricultural Irrigation 2 4 216 222 

Sewage Treatment Facilities 0 15 19 34 

Sand Blasting 12 25 178 215 

Animal Food Manufacturing 1 1 15 17 

Fruit Concentrate Processing 0 1 1 2 

Canned Vegetable Plant 0 1 1 2 

Meat Packing 1 5 45 51 

Mint Distillery 0 2 0 2 

Lumber Saw Mill 1 3 25 29 

Softwood, Veneer and Plywood 0 0 4 4 

Reconstituted Wood Products 0 1 1 2 

Millwork 2 3 20 25 

Wood Pellet Fuel Plant 1 2 8 11 

Box Manufacturing 0 1 5 6 

Printing Operations Lithographic 11 16 183 210 

Petroleum Refineries (Post-harvest Coating Manufacture for Fruit-Paraffin) 0 2 9 11 

Asphalt Hot Mix 0 6 42 48 

Chemical Preparation 0 2 63 65 

Liquid Fertilizer Storage Distribution 0 3 5 8 

Explosives Manufacturing 0 0 0 0 

Clay and Ceramics Operations 0 1 178 179 

Concrete Batching Plant 2 11 68 81 

Fiber Glass Operations 0 2 17 19 

Mineral and Earth Manufacturing 0 0 1 1 

Aluminum Manufacturing 0 0 2 2 

Casting Foundry 1 2 13 16 

Fabricated Structural Metal 5 10 102 117 

Metal Can Manufacturing 0 1 1 2 

Coating Painting Facilities 2 4 201 207 

(continued) 
2-13 

Table 2-7. Estimated and Reported Existing Minor Sources in Indian Country (2009) 

(continued) 

 EPA Region Groups 

Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total 

Surface Coating Operations 1 2 16 19 

Fabricated Metal Products 3 8 62 73 

Machinery Manufacturing 1 3 10 14 

Communications Equipment Manufacturing 0 1 7 8 

Transportation Equipment Manufacturing 0 0 6 6 

Wood Kitchen Cabinet Manufacturing 4 6 39 49 

Furniture Manufacturing 0 1 8 9 

Grain Elevator 2 24 81 107 

Gasoline Bulk Plant 1 5 37 43 

Automobile Dealers 18 34 345 397 

Gas Stations 40 157 1,016 1,213 

Pipeline Transportation of Natural Gas 0 2 34 36 

Airports and Services 0 3 25 28 

Professional, Scientific, Technical Services 4 7 50 61 

Solid Waste landfill 0 9 21 30 

Other Solid Waste/Incineration 0 0 22 22 

Hospitals 3 8 87 98 

Social Assistance 11 18 170 199 

Casino/Hotels 10 51 136 197 

Restaurants 74 133 1,326 1,533 

Automobile Light Duty Operation 31 57 538 626 

Automobile Refinishing Shop 14 31 250 295 

Welding Operations 9 22 260 291 

Cremation 1 3 31 35 

Dry Cleaner 6 13 173 192 

Tribal Governments 0 0 145 145 

Boilers 0 1 126 127 

Feedlot 0 0 0 0 

Surgical Instrument Manufacturing 0 0 0 0 

Paper Manufacturing 0 0 0 0 

Residential Construction General Contractor 0 0 0 0 

Other 0 0 23 23 

Grand Total 288 779 30,547 31,614 
2-14 

Table 2-8. Estimated and Reported Existing Minor Sources in Indian Country (2010) 

 EPA Region Groups 

Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total 

Logging 5 8 49 62 

Forestry Support Activities 0 1 19 20 

Oil and Natural Gas Wells 5 30 24,923 24,958 

Rock Mining Gravel 3 12 85 100 

Electric Power Generation 0 3 80 83 

Natural Gas Distribution 1 3 78 82 

Agricultural Irrigation 2 4 219 225 

Sewage Treatment Facilities 0 16 19 35 

Sand Blasting 13 25 180 218 

Animal Food Manufacturing 1 1 15 17 

Fruit Concentrate Processing 0 1 1 2 

Canned Vegetable Plant 0 1 1 2 

Meat Packing 1 5 45 51 

Mint Distillery 0 2 1 3 

Lumber Saw Mill 1 4 25 30 

Softwood, Veneer and Plywood 0 0 4 4 

Reconstituted Wood Products 0 1 1 2 

Millwork 2 3 20 25 

Wood Pellet Fuel Plant 1 2 8 11 

Box Manufacturing 0 1 5 6 

Printing Operations Lithographic 11 17 185 213 

Petroleum Refineries (Post-harvest Coating Manufacture for Fruit-Paraffin) 0 2 9 11 

Asphalt Hot Mix 0 6 44 50 

Chemical Preparation 0 2 66 68 

Liquid Fertilizer Storage Distribution 0 3 5 8 

Explosives Manufacturing 0 0 0 0 

Clay and Ceramics Operations 0 1 181 182 

Concrete Batching Plant 3 11 69 83 

Fiber Glass Operations 0 2 18 20 

Mineral and Earth Manufacturing 0 0 1 1 

Aluminum Manufacturing 0 0 2 2 

Casting Foundry 1 3 13 17 

Fabricated Structural Metal 5 11 103 119 

Metal Can Manufacturing 0 1 1 2 

Coating Painting Facilities 2 4 206 212 

(continued) 
2-15 

Table 2-8. Estimated and Reported Existing Minor Sources in Indian Country (2010) 

(continued) 

 EPA Region Groups 

Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total 

Surface Coating Operations 1 2 17 20 

Fabricated Metal Products 3 9 63 75 

Machinery Manufacturing 1 3 10 14 

Communications Equipment Manufacturing 0 1 7 8 

Transportation Equipment Manufacturing 0 0 6 6 

Wood Kitchen Cabinet Manufacturing 4 6 39 49 

Furniture Manufacturing 0 1 8 9 

Grain Elevator 2 25 82 109 

Gasoline Bulk Plant 1 5 37 43 

Automobile Dealers 19 35 348 402 

Gas Stations 42 158 1,031 1,231 

Pipeline Transportation of Natural Gas 0 2 34 36 

Airports and Services 0 3 26 29 

Professional, Scientific, Technical Services 4 7 51 62 

Solid Waste landfill 0 9 22 31 

Other Solid Waste/Incineration 0 0 23 23 

Hospitals 3 8 89 100 

Social Assistance 11 19 172 202 

Casino/Hotels 10 51 138 199 

Restaurants 76 136 1,341 1,553 

Automobile Light Duty Operation 33 58 546 637 

Automobile Refinishing Shop 16 31 253 300 

Welding Operations 9 22 264 295 

Cremation 1 3 31 35 

Dry Cleaner 6 14 176 196 

Tribal Governments 0 0 147 147 

Boilers 0 1 131 132 

Feedlot 0 0 0 0 

Surgical Instrument Manufacturing 0 0 0 0 

Paper Manufacturing 0 0 0 0 

Residential Construction General Contractor 0 0 0 0 

Other 0 0 24 24 

Grand Total 299 795 31,797 32,891 

Sectors identified by EPA from various sources (see above); number of facilities estimated based on AIAN share of 

total income in each EPA Region. 
2-16 

Table 2-9 presents projected new minor sources for the first 6 years after the effective 

date of the rule. EPA projects that Regions 1, 2, and 4 will have 17 new sources during the first 6 

years following the effective date of the rule. Regions 5, 7, and 10 are projected to have 59 new 

minor sources, and Regions 6, 8, and 9 are projected to have 7,530 new minor sources. 

Therefore, EPA projects a total of 7,606 new minor sources in Indian Country during the 6-year 

period, 2011 through 2016. 

In summary, EPA estimates that 32,900 existing minor source facilities would be 

required to register, and 79 existing synthetic minor sources would be required to obtain new 

permits. Over the first 6 years of the rule, EPA projected that the rule will affect 7,606 new true 

minor sources, 48 new synthetic minor sources, 12 minor modifications to existing major 

sources, and 984 minor modifications to existing minor sources. In addition, EPA believes the 

rule would provide a new regulatory mechanism to permit an estimated 5 new major sources in 

nonattainment areas and at most one major modification to a major source over the 6-year 

period. 
2-17 

Table 2-9. Projected New Minor Sources in Indian Country, First 6 Years (2011–2016) 

 EPA Region Groups 

Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total 

Logging 0 1 3 4 

Forestry Support Activities 0 0 1 1 

Oil and Natural Gas Wells 0 2 7,006 7,008 

Rock Mining Gravel 0 0 7 7 

Electric Power Generation 0 0 7 7 

Natural Gas Distribution 0 0 6 6 

Agricultural Irrigation 0 0 21 21 

Sewage Treatment Facilities 0 2 2 4 

Sand Blasting 1 2 11 14 

Animal Food Manufacturing 0 0 1 1 

Fruit Concentrate Processing 0 0 0 0 

Canned Vegetable Plant 0 0 0 0 

Meat Packing 0 0 3 3 

Mint Distillery 0 0 0 0 

Lumber Saw Mill 0 0 3 3 

Softwood, Veneer and Plywood 0 0 1 1 

Reconstituted Wood Products 0 0 0 0 

Millwork 0 0 1 1 

Wood Pellet Fuel Plant 0 0 0 0 

Box Manufacturing 0 0 0 0 

Printing Operations Lithographic 0 1 13 14 

Petroleum Refineries (Post-harvest Coating Manufacture for Fruit-Paraffin) 0 0 1 1 

Asphalt Hot Mix 0 0 5 5 

Chemical Preparation 0 0 7 7 

Liquid Fertilizer Storage Distribution 0 0 0 0 

Explosives Manufacturing 0 0 0 0 

Clay and Ceramics Operations 0 0 18 18 

Concrete Batching Plant 0 1 5 6 

Fiber Glass Operations 0 0 1 1 

Mineral and Earth Manufacturing 0 0 0 0 

Aluminum Manufacturing 0 0 0 0 

Casting Foundry 0 0 1 1 

Fabricated Structural Metal 0 1 6 7 

Metal Can Manufacturing 0 0 0 0 

Coating Painting Facilities 0 0 24 24 

(continued) 
2-18 

Table 2-9. Projected New Minor Sources in Indian Country, First 6 Years (2011–2016) 

(continued) 

 EPA Region Groups 

Industry Description 1, 2, 4 5, 7, 10 6, 8, 9 Total 

Surface Coating Operations 0 0 1 1 

Fabricated Metal Products 0 0 4 4 

Machinery Manufacturing 0 0 1 1 

Communications Equipment Manufacturing 0 0 0 0 

Transportation Equipment Manufacturing 0 0 0 0 

Wood Kitchen Cabinet Manufacturing 0 0 2 2 

Furniture Manufacturing 0 0 0 0 

Grain Elevator 0 2 8 10 

Gasoline Bulk Plant 0 0 2 2 

Automobile Dealers 2 3 21 26 

Gas Stations 3 15 77 95 

Pipeline Transportation of Natural Gas 0 0 2 2 

Airports and Services 0 0 3 3 

Professional, Scientific, Technical Services 0 1 3 4 

Solid Waste Landfill 0 1 2 3 

Other Solid Waste/Incineration 0 0 3 3 

Hospitals 0 0 7 7 

Social Assistance 0 2 11 13 

Casino/Hotels 1 4 15 20 

Restaurants 6 11 90 107 

Automobile Light Duty Operation 3 5 38 46 

Automobile Refinishing Shop 1 2 16 19 

Welding Operations 0 2 19 21 

Cremation 0 0 3 3 

Dry Cleaner 0 1 13 14 

Tribal Governments 0 0 15 15 

Boilers 0 0 17 17 

Feedlot 0 0 0 0 

Surgical Instrument Manufacturing 0 0 0 0 

Paper Manufacturing 0 0 0 0 

Residential Construction General Contractor 0 0 0 0 

Other 0 0 3 3 

Grand Total 17 59 7,530 7,606 

Growth rate based on U.S. Census Bureau. Projected State Populations, by Sex, Race, and Hispanic Origin, 1995–

2025. http://www.census.gov/population/projections/state/stpjrace.txt. 
3-1 

SECTION 3 

COST ANALYSIS 

All new sources in Indian Country will be required to obtain a permit and conduct 

compliance activities referred to broadly as monitoring, recordkeeping, and reporting (MRR) 

activities. In addition, new sources may be required to install control equipment and undertake 

other compliance activities; these activities will be different for new minor sources and new 

major sources. Thus, we discuss the development of cost estimates separately for minor sources 

and major sources. 

3.1 General Approach for Estimating Compliance Costs for New Minor Sources 

EPA began by identifying the minor source categories listed in Table 2-9 having the 

largest numbers of projected new sources and grouped several similar source categories together. 

After identifying the most common types of minor sources likely to be affected by the rule, EPA 

developed an approach that estimates compliance costs for a typical new facility for each source 

category. New minor sources will be subject to various requirements during the permitting 

process under the rule, including 

• case-by-case review of control technology by EPA or Tribal air agency, 

• air quality impact analysis upon request by the reviewing authority, 

• MRR activities, and 

• public participation through public notices and comment requirements and 

administrative and judicial review upon a permit appeal. 

EPA estimated a range of costs of compliance for the rule, with a lower-bound estimate 

of only permitting, MRR costs and an upper-bound estimate including both emissions control 

costs and MRR costs. 

All new minor sources will be required to obtain a permit and conduct MRR activities. 

Thus, estimated costs of MRR activities represent the minimum costs that will be incurred by 

affected new sources. A full description of the development of these cost estimates, along with 

the assumptions used for labor rates and capital outlays, is presented in the Supporting Statement 

for the Information Collection Request (ICR). 

In addition to MRR activities, some new sources will be required to install control 

equipment. The specific control technology requirements are uncertain, because of the case-bycase control technology review process. EPA has thus estimated the costs of installing Best 

Available Control Technology (BACT) controls for each source category, recognizing that most 
3-2 

new minor sources will not be required to install BACT controls. Thus, BACT control costs plus 

MRR costs represent the maximum costs likely to be incurred by a new minor source. 

To estimate the costs of BACT controls, process throughput or operating capacities are 

needed to size and cost air pollution controls and to estimate emissions. These values are selected 

to reflect typical minor source sizes for the source category. In some cases they are based on a 

national average value; others are based on existing size categories where the lower-end values 

are selected to characterize minor sources, and in some cases, the values were based on 

information contained in the available Tribal emission inventories. EPA used this information to 

develop estimates of compliance costs for typical new facilities in each minor source category. 

EPA then reviewed existing regulations to determine controls required in the absence of 

the rule and estimated incremental control costs attributable to the rule. These costs included 

one-time costs, such as purchasing and installing control equipment and annual costs such as 

labor and materials. The one-time costs were annualized over their expected service life at a 7% 

rate of interest, reflecting private cost of capital. The sum of the annualized one-time costs and 

the annual costs are the total annualized costs incurred by each facility type. 

EPA has adequate information to complete cost estimates for emission controls. 

However, because of a lack of data on existing sources in Indian Country and the uncertainties 

associated with projecting the number of new facilities and modifications to existing facilities in 

the future, the current data will provide national cost estimates that are correspondingly 

uncertain. EPA estimated the costs of emissions controls based on the assumption that all 

affected new sources would be required to install BACT. Because requirements for each new 

source will be determined on a case-by-case basis, this will likely overstate the costs for some 

facilities. 

Appendix B presents the estimated compliance costs for typical new sources in Indian 

Country. For each source category, the table in Appendix B shows the estimated capital cost per 

source of BACT and the total annualized BACT cost, including annualized capital costs and 

annual costs such as labor and materials. 

Because EPA is delaying implementation of the rule for new minor sources and minor 

modifications of minor sources for 18 months, and because existing true minor sources and 

existing synthetic minor sources experience one-time costs during the first year following the 

effective date of the rule, we are presenting the costs broken out according to time period. We 

present the costs for the first year (including annualized costs for new and modified minor 

sources and one-time costs for existing sources), for the second year (showing registration costs 

for new and modified sources during the first 6 months and permitting costs during the second 6 

months), and for years 3 through 6 (permitting costs for new and modified sources). First-year 
3-3 

costs affect many more facilities, but the cost per facility is generally low, approximately $62 per 

source. In subsequent years, the 32,891 existing minor sources and the 79 existing synthetic 

minor sources no longer incur costs, so the number of affected facilities is much lower; however, 

the cost per facility increases. National BACT control costs for the first year are shown in 

Table 3-1, for the second year in Table 3-2, and for subsequent years in Table 3-3. They were 

computed by multiplying the number of projected affected sources in each category by the 

estimated control costs per source. This is certainly an overestimate of the control costs that will 

be incurred by affected new and modified minor sources under the rule’s case-by-case control 

technology review. EPA recognizes that not all new sources will be required to install BACT 

controls; however, these represent upper-bound national control cost estimates that are needed to 

compute the maximum national costs, which are reported later in this section. 

Table 3-1. Estimated National Total Annualized Control Costs by Source Type, First Year 

Affected Source Type 

Number of Affected 

Sources, First Year 

National Total Annualized 

Control Costs (103 $2008) 

New Minor Sources 1,268 $0 

Modifications to Minor Sources 164 $0 

Existing Synthetic Minor Sources 79 $0 

Existing True Minor Sources 32,891 $0 

Minor Modifications to Major Sources 2 $0 

New Synthetic Minor Sources 8 $80 

Totals 34,412 $80 

Table 3-2. Estimated National Total Annualized Control Costs by Source Type, Second 

Year 

Affected Source Type 

Number of Affected 

Sources, Second Year 

National Total Annualized 

Control Costs (103 $2008) 

New Minor Sources (Costs Applicable for the First 6 

Months of the Second Year) 

634 $0 

New Minor Sources (Costs Applicable for the Second 6 

Months of the Second Year) 

634 $270 

Modifications to Minor Sources (Costs Applicable for 

the First 6 Months of the Second Year) 

82 $0 

Modifications to Minor Sources (Costs Applicable for 

Second 6 Months of the Second Year) 

82 $80 

Minor Modifications to Major Sources 2 $0 

New Synthetic Minor Sources 8 $80 

Totals 1,442 $430 
3-4 

Table 3-3. Estimated National Total Annualized Control Costs by Source Type, Years 3 

through 6 (103

 $2008)

Affected Source Type 

Number of Affected 

Sources per Year 

National Total Annualized 

Control Costs (103 $2008) 

New Minor Sources 1,268 $540 

Modifications to Minor Sources 164 $160 

Minor Modifications to Major Sources 2 $0 

New Synthetic Minor Sources 8 $80 

Totals 1,442 $780 

In addition to control costs, affected sources are expected to incur MRR costs associated 

with the NSR permit program. Some of the MRR costs are one-time costs, and others are annual 

costs. The detailed explanation for the rule’s MRR costs is presented in the Supporting Statement 

(EPA, 2011). Table 3-4 shows the estimated MRR costs for the first year, Table 3-5 shows 

estimated MRR costs for the second year, and Table 3-6 presents estimated MRR costs for 

subsequent years. As explained above, these are broken out according to time period because the 

rule’s requirements for several source types vary over time. MRR costs are the minimum or 

lower-bound costs that could be incurred by affected sources. 

Table 3-4. Estimated Lower-Bound National Total Annualized (MRR) Costs, First Year 

(103

 $2008) 

Affected Source Type 

Number of Affected 

Sources, First Year 

Total Annual 

Cost per Source 

(103

 $2008) 

National Total 

Annualized MRR Costs, 

First Year (103 $2008) 

New Minor Sources 1,268 $0.062 $79 

Modifications to Minor Sources 164 $0.062 $10 

Existing Synthetic Minor Sources (One 

Time Cost, First Year) 

79 $0.62 $50 

Existing True Minor Sources (One Time 

Cost, First Year) 

32,891 $0.062 $2,040 

Minor Modifications to Major Sources 2 $9.435 $20 

New Synthetic Minor Sources 8 $9.435 $80 

Totals 34,412 $2,279 

a

 For details, see the Supporting Statement for the Review of New Sources and Modifications in Indian Country 

Rule. 
3-5 

Table 3-5. Estimated Lower-Bound National Total Annualized (MRR) Costs, Second Year 

(103

 $2008) 

Affected Source Type 

Number of 

Affected Sources, 

Second Year 

Total Annual 

Cost per Source 

(103 $2008) 

National Total 

Annualized MRR Costs 

(103 $2008) 

New Minor Sources (Costs Applicable for First 

6 Months of the Second Year) 

634 $0.062 $79 

New Minor Sources (Costs Applicable for 

Second 6 Months of the Second Year) 

634 $9.435 $5,982 

Modifications to Minor Sources (Costs 

Applicable for First 6 Months of the Second 

Year) 

82 $0.062 $10 

Modifications to Minor Sources (Costs 

Applicable for Second 6 Months of the 

Second Year) 

82 $9.435 $774 

Minor Modifications to Major Sources 2 $9.435 $20 

New Synthetic Minor Sources 8 $9.435 $80 

Totals 1,442 $6,945 

Table 3-6. Estimated Lower-Bound National Total Annualized (MRR) Costs, Years 3 

through 6 (103

 $2008) 

Affected Source Type 

Number of Affected 

Sources per Year, 

Years 3 through 6 

Total Annual Cost 

per Source 

National Total 

Annualized MRR 

Costs, Subsequent 

Yearsa (103 $2008) 

New Minor Sources 1,268 $9.435 $12,000 

Modifications to Minor Sources 164 $9.435 $1,550 

Minor Modifications to Major Sources 2 $9.435 $20 

New Synthetic Minor Sources 8 $9.435 $80 

Totals 1,442 $13,650 

a

 For details, see the Supporting Statement for the Review of New Sources and Modifications in Indian Country 

Rule. 

For the first year following promulgation, existing, new, and modified minor sources 

incur costs to comply with the rule’s registration requirements. Existing synthetic minor sources 

incur costs to obtain new permits. After the first year, existing sources incur no costs unless they 

choose to modify their facilities. During the first half of the second year, new and modified 

minor sources are required to register; during the second half of the second year, they are 

required to obtain a permit. The estimated MRR costs for the second year reflect these 
3-6 

requirements. During years 3 through 6, all new sources are required to obtain permits and incur 

the estimated MRR costs associated with those activities. 

Table 3-7 shows estimated upper-bound total national costs, including both BACT 

control costs and MRR costs by source category for the first year following rule promulgation. 

Table 3-8 shows estimated upper-bound costs for the second year, including both MRR costs and 

BACT costs where applicable. Table 3-9 shows estimated total national costs, including 

estimated BACT and MRR costs for years 3 through 6. Estimated upper-bound costs increase 

from $2.4 million to $7.4 million from the first to the second year following promulgation. For 

subsequent years, the estimated upper-bound national total annualized costs equal approximately 

$14.4 million. 

Table 3-7. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs, 

First Year (103

 $2008) 

Affected Source Type 

Number of Affected 

Sources per Year 

National Total 

Annualized Costs (First 

Year) 

New Minor Sources 1,268 $79 

Modifications to Minor Sources 164 $10 

Existing Synthetic Minor Sources (One Time, First Year) 79 $50 

Existing True Minor Sources (One Time, First Year) 32,891 $2,040 

Minor Modifications to Major Sources 2 $20 

New Synthetic Minor Sources 8 $160 

Totals 34,412 $2,359 

3.2 Costs for Major Sources 

EPA estimates that there will be approximately one new major source per year in the oil 

and gas extraction sector, with a total annualized cost of approximately $40,000, including 

control costs and MRR costs, during the 6 years following promulgation. However, EPA 

believes that new major sources would have incurred these costs in the absence of the rule, 

because EPA would have been required to implement a source-specific FIP. Therefore, the final 

rule just provides a regulatory mechanism for permitting such sources; it does not change any of 

the compliance requirements. In addition, since the permitting process may be less uncertain 

under the final rule, new and modifying major sources could potentially experience cost savings 

compared to baseline conditions. Thus, the costs in Table 3-10 are not considered to be 

incremental because of the rule. Because EPA expects at most one major modification in Indian 

Country during the 6-year period, annual costs for major modifications are assumed to be $0. 
3-7 

Table 3-8. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs, 

Second Year (103

 $2008) 

Affected Source Type 

Number of Affected 

Sources per Year 

National Total 

Annualized Costs 

(Second Year) 

New Minor Sources (Costs Applicable for First 6 Months of Second 

Year) 

634 $79 

New Minor Sources (Costs Applicable for Second 6 Months of Second 

Year) 

634 $6,252 

Modifications to Minor Sources (Costs Applicable for First 6 Months 

of Second Year) 

82 $10 

Modifications to Minor Sources (Costs Applicable for Second 6 

Months of Second Year) 

82 $854 

Minor Modifications to Major Sources 2 $20 

New Synthetic Minor Sources 8 $160 

Totals 1,442 $7,375 

Table 3-9. Estimated Upper-Bound National Total Annualized (Control and MRR) Costs, 

Years 3 through 6 (103

 $2008) 

Affected Source Type 

Number of Affected 

Sources per Year 

National Total 

Annualized Costs 

(Subsequent Years) 

New Minor Sources 1,268 $12,540 

Modifications to Minor Sources 164 $1,710 

Minor Modifications to Major Sources 2 $20 

New Synthetic Minor Sources 8 $160 

Totals 1,442 $14,430 

Table 3-10. Costs for New Major Sources in Nonattainment Areas (103 $2008) 

Costs 

Number of Affected 

Sources per Year 

Total Annualized 

Costs (103

 $2008) 

Control Costs 1 $30 

MRR Costs 1 $10 

Totals 1 $40 
3-8 

3.3 Agency Costs 

In addition to costs incurred by regulated facilities, EPA examined the costs to the 

Agency resulting from the rule. These costs are discussed in detail in the Supporting Statement 

for the Review of New Sources and Modifications in Indian Country (EPA, 2011). The costs are 

estimated by examining the Agency activities associated with administering the rule for each 

type of affected facility, estimating the number of hours required for each activity, and 

multiplying these hours by appropriate hourly salary rates to compute the total labor cost per 

affected source. 

The average total annual cost to the Agency per affected source is calculated by 

determining the total labor cost for all the various respondent activities. The costs for those 

activities are then added to any associated costs (e.g., total travel expenses for inspections 

attended) to get the average Agency burden per facility per year. Because the Agency activities 

are similar for processing a permit for a major or minor source, and because we anticipate only 

one new major source in a nonattainment area per year for the first 3 years following 

promulgation, the cost to the Agency for each affected source is assumed to be the same. The 

average total annual cost to the Agency per affected source (new majors, new minors, and 

modifications) given in Attachment 2 of the ICR, including the cost of labor, materials, 

operation, and maintenance, is $3,037 per year. The average total cost to the Agency per affected 

existing synthetic minor source is $693 and per true existing minor source is $180. (A detailed 

description of the estimation of Agency costs is provided in the Supporting Statement for the 

Review of New Sources and Modifications in Indian Country.) (EPA, 2011) 

The bottomline Agency total annual burden costs are calculated by taking the average 

cost to the Agency per facility ($4,932) and multiplying by the number of affected sources in 

Indian Country during the first 3 years following promulgation. The nationwide total annual cost 

to EPA or Tribal agencies as shown in Table 3 of the ICR Supporting Statement is $17.1 million 

for the first 3 years (an average of $5.7 million per year). Total national costs, including costs for 

affected sources and costs to the Agency, are shown in Table 3-11. First-year costs range from 

$8.0 to $8.1 million, second-year costs range from $12.6 to $13.1 million, and subsequent-year 

costs range from $19.4 to $20.1 million. 
3-9 

Table 3-11. Summary of National Costs, Including Agency Costsa (106 $2008) 

Time Period 

Number of 

Affected 

Sources 

Lower-Bound 

Estimate (MRR 

Costs Only) 

National 

Lower-Bound 

Costs, 

Including 

Agency Costs 

Upper-Bound 

Estimate (MRR 

Costs Plus 

Emissions 

Control Costs) 

National 

Upper-Bound 

Costs, 

Including 

Agency Costs 

First-Year Costs 34,412 $2.3 $8.0 $2.4 $8.1 

Second-Year Costs 1,442 $6.9 $12.6 $7.4 $13.1 

Costs for Years 3 

through 6 

1,442 $13.7 $19.4 $14.4 $20.1 

a

Agency costs are estimated to average $5.7 million per year. 
4-1 

SECTION 4 

ECONOMIC IMPACT ANALYSIS METHODS AND RESULTS 

The purpose of the EIA is to evaluate the effect of the rule on the welfare of affected 

stakeholders and society as a whole. To inform its assessment of economic impacts, the Agency 

developed a qualitative assessment of potential economic impacts of the rule on facility 

construction and market prices. In addition, EPA conducted a simple screening analysis, 

described in more detail below, to develop quantitative measures of the potential impacts of the 

rule. As described in Section 3 above, EPA expects new minor source facilities to incur some 

incremental costs as a result of the rule. In this analysis, EPA presents a range of economic 

impacts corresponding to the range of potential costs of compliance described in Section 3. At a 

minimum, facilities are expected to incur MRR costs; at a maximum, new sources will also incur 

the costs of installing BACT controls. This is a maximum cost assumption, because most new 

sources will not be required to install BACT controls. Existing minor and major sources may 

incur compliance costs associated with permitting and emission controls for modifications to 

their facilities. Because the costs and impacts are expected to be different for minor sources and 

major sources, we analyze them separately. 

4.1 Impacts on New Minor Sources, Minor Modifications, and New Synthetic Minor 

Sources 

In this section, EPA presents its analysis of economic impacts on minor source facilities. 

Because minor source facilities are largely unregulated at baseline, EPA estimates that 

companies wishing to site new minor source facilities in Indian Country will incur some 

incremental costs. The incremental costs include costs associated with permitting, MRR, and 

emission control costs for companies choosing to invest in a new minor source facility or to 

make minor modifications to existing minor sources. 

The rule could alter firms’ economic choices because it would increase the costs of 

production for siting new minor source facilities in Indian Country. Firms considering building 

new facilities are faced with a decision on location and size of the new facility. In its analysis, 

EPA assumes that, without the rule, new minor source facilities in Indian Country are not 

regulated; thus, the rule will increase the cost of siting such a facility. Because the rule affects 

only new and modified sources in Indian Country, it will increase the costs of siting these 

sources in Indian Country, relative to other locations. The rule incorporates case-by-case review 

of control technologies, in an effort to protect air quality in Indian Country while allowing 

economic growth. 
4-2 

The economic sectors expected to invest in new minor source facilities or minor 

modifications in Indian Country produce a variety of goods and face demand curves of varying 

elasticities. Similarly, different types of facilities will face different estimated incremental costs. 

EPA does not have sufficient data to estimate the market impacts (changes in prices and market 

quantities) or the impacts on investment decisions (changes in rates of return and in numbers of 

projects undertaken) in each affected sector. However, EPA has undertaken a screening analysis 

to assess the relative magnitude of the costs of compliance for each affected economic sector. 

As discussed in Section 3, EPA has delayed implementation of the rule for new minor 

sources and minor modifications at minor sources; these source types would only incur the costs 

of registration during the first 18 months following promulgation. Because costs for new minor 

sources and minor modifications would increase after the first 18 months following rule 

promulgation, EPA’s screening assessment compares the total annualized cost of complying with 

the rule for typical facilities in each sector after the first 18 months (for lower-bound MRR costs 

only, and upper-bound MRR plus BACT costs) with facility sales for typical facilities in each 

sector. Table 4-1 shows the establishment sales test (estimated total annualized cost for a typical 

affected facility)/(sales receipts for a typical establishment) for MRR costs only. Data on the 

sales receipts, number of enterprises (firms), and number of establishments for these sectors were 

obtained from the Census Bureau’s Statistics of U.S. Businesses, 2002 (SUSB, 2002) and 

County Business Patterns, 2002 (CBP, 2002). 

Overall, the MRR costs of complying with the rule for minor sources are generally low 

and unlikely to cause significant reductions in the rate of investment in new minor source 

facilities in Indian Country. In Table 4-1, costs are shown to be less than 1% of sales and, thus, 

are not likely to result in significant impacts to the firms owning these facilities. For facilities in 

the auto body refinishing sector, costs are estimated to fall between 1% and 1.5% of sales. This 

ratio is also low enough that it is not expected to have an adverse impact on the facilities. 

Some facilities will be required to install control equipment and will incur not only the 

costs of MRR activities, but also the costs of purchasing, installing, and operating required 

controls. The maximum level of control such affected facilities would be required to achieve 

would be BACT. Thus, the upper-bound impacts are computed by summing estimated MRR 

costs and BACT control costs for each sector. Table 4-2 presents establishment sales test results 

(cost-to-sales ratios) for typical facilities in each sector under the maximum cost assumptions. 

Across all source categories, cost-to-sales ratios range from 0.02% to 2.87%. Examining the 

upper-bound costs, we see that six sectors have costs between 1% and 3% of sales. No sectors 

have costs exceeding 3% of sales. 
4-3 

Table 4-1. Lower-Bound Cost-to-Sales Ratios (MRR Costs Only), for Minor Sources, 

Minor Modifications to Existing Major and Minor Sources, and New Synthetic Minor 

Sources, by Industry Sector 

Source Category NAICS Code 

Estimated 

Number of 

Sourcesa

Average Total 

Annualized Cost Per 

Entity ($1,000) 

Costs as 

Percentage of 

Sales 

Animal Food Manufacturing 311119 1 $9.44 0.06% 

Asphalt Hot Mix 324121 7 $9.44 0.14% 

Auto Body Refinishing 811121 27 $9.44 1.25% 

Beef Cattle Complex, Slaughter House and 

Meat Packing Plant 

3116 5 $9.44 0.02% 

Casting Foundry (Iron) 331511 2 $9.44 0.05% 

Chemical Preparation 3251 9 $9.44 0.02% 

Clay and Ceramics Operations (Kilns) 32711 23 $9.44 0.22% 

Concrete Batching Plant 327320 8 $9.44 0.20% 

Crude Petroleum and Natural Gas Extraction 21111 7,781 $9.44 0.04% 

Electric Power Generation 22111 9 $9.44 0.02% 

Fabricated Metal Products 3329 77 $9.44 0.12% 

Fabricated Structural Metal 3323 123 $9.44 0.21% 

Fiber Glass Operations 3279 2 $9.44 0.16% 

Gasoline Bulk Plant 424710 4 $9.44 0.01% 

Gasoline Station (Storage Tanks, Refueling) 4471 160 $9.44 0.39% 

Grain Elevator 424510 13 0.04% 

Machinery Manufacturing 33311 14 $9.44 0.05% 

Millwork (Wood Products Mfg) 32191 2 $9.44 0.17% 

Natural Gas Distribution 221210 8 $9.44 0.04% 

Oil and Gas Production/Operations 211112 6 $9.44 0.04% 

Other (Natural Gas-Fired Boilers)-Used 

Casino/Hotels 

72112 105 $9.44 0.00% 

Printing Operations (Lithographic) 323110 20 $9.44 0.30% 

Professional, Scientific, and Technical Services 54171 19 $9.44 0.16% 

Sand and Gravel Mining 212321 10 $9.44 0.41% 

Sand and Shot Blasting Operations 238990 21 $9.44 0.85% 

Sawmills 32113 4 $9.44 0.14% 

Sewage Treatment Facilities 221320 5 $9.44 0.65% 

Softwood Veneer and Plywood Manufacturing 321212 1 $9.44 0.02% 

Solid Waste Landfill 562212 5 $9.44 0.19% 

Surface Coating Operations 332812 32 $9.44 0.19% 

Wood Kitchen Cabinet Manufacturing 337110 3 $9.44 0.52%

Other (No Costs Estimated) 158 

Total 8,664 

a

Sources include new minor sources, minor modifications to existing major or minor sources, and new synthetic 

minor sources. 
4-4 

Table 4-2. Upper-Bound Cost-to-Sales Ratios, for Minor Sources, Minor Modifications to 

Existing Major and Minor Sources, and New Synthetic Minor Sources, BACT and MRR 

Costs, by Industry Sector 

Source Category NAICS Code 

Estimated 

Number of 

Sourcesa

Average Total 

Annualized Cost Per 

Entity ($1,000) 

Costs as 

Percentage of 

Sales 

Animal Food Manufacturing 311119 1 $15.00 0.10% 

Asphalt Hot Mix 324121 7 $9.44 0.14% 

Auto Body Refinishing 811121 27 $9.44 1.25% 

Beef Cattle Complex, Slaughter House and 

Meat Packing Plant 

3116 5 $18.47 0.05% 

Casting Foundry (Iron) 331511 2 $10.68 0.06% 

Chemical Preparation 3251 9 $9.44 0.02% 

Clay and Ceramics Operations (Kilns) 32711 23 $9.44 0.22% 

Concrete Batching Plant 327320 8 $135.13 2.87% 

Crude Petroleum and Natural Gas Extraction 21111 7,781 $9.44 0.04% 

Electric Power Generation 22111 9 $9.44 0.02% 

Fabricated Metal Products 3329 77 $9.44 0.12% 

Fabricated Structural Metal 3323 123 $9.44 0.21% 

Fiber Glass Operations 3279 2 $9.44 0.16% 

Gasoline Bulk Plant 424710 4 $15.93 0.01% 

Gasoline Station (Storage Tanks, Refueling) 4471 160 $9.99 0.41% 

Grain Elevator 424510 13 $69.36 0.27% 

Machinery Manufacturing 33311 14 $9.44 0.05% 

Millwork (Wood Products Mfg) 32191 2 $45.46 0.82% 

Natural Gas Distribution 22121 8 $9.44 0.05% 

Oil and Gas Production/Operations 211112 6 $9.44 0.04% 

Other (Natural Gas-Fired Boilers)-Used 

Casino/Hotels 

72112 105 $18.47 0.03% 

Printing Operations (Lithographic) 323110 20 $11.64 0.37% 

Professional, Scientific, and Technical Services 54171 19 $18.47 0.32% 

Sand and Gravel Mining 212321 10 $49.35 2.16% 

Sand and Shot Blasting Operations 238990 21 $19.77 1.77% 

Sawmills 32113 4 $49.35 0.73% 

Sewage Treatment Facilities 221320 5 $9.44 0.65% 

Softwood Veneer and Plywood Manufacturing 321212 1 $45.46 0.11% 

Solid Waste Landfill 562212 5 $49.58 1.01% 

Surface Coating Operations 332812 32 $9.44 0.19% 

Wood Kitchen Cabinet Manufacturing 337110 3 $45.46 2.51% 

Other (No Costs Estimated) 158 

Total 8,664 

a

Sources include new minor sources, minor modifications to existing major or minor sources, and new synthetic 

minor sources. 
4-5 

The analysis described above is based on a range of estimated costs of compliance for 

typical minor source facilities compared to estimated sales for typical facilities. Generally, EPA 

believes that the costs will be substantially lower than the upper-bound estimates and would thus 

not impose significant impacts on typical firms considering construction or modification of a 

minor source. Within each sector there is likely to be substantial variation in costs, facility sales, 

and company sales and profits. Thus, it is possible that individual companies might find that the 

costs for a specific project would be sufficient to discourage them from investing. 

4.2 Impacts on Major Sources 

EPA projects new major sources in nonattainment areas in only one sector: oil and gas 

extraction. EPA estimates that there will be at most one new major source per year in 

nonattainment areas in Indian Country. EPA estimated compliance costs for new major sources 

in nonattainment areas in Indian Country; however, EPA believes that these costs would 

generally have been incurred without the rule and, thus, will have no incremental adverse 

economic impact on new major sources. 

In the absence of the final rule, EPA would be required to implement a source-specific 

FIP. Therefore, the final rule just provides a regulatory mechanism for permitting such sources; it 

does not change any of the compliance requirements. In addition, since the permitting process 

may be less uncertain under the final rule, new and modifying major sources could potentially 

experience cost savings compared to baseline conditions. Reducing the uncertainty about the 

timing and cost of permitting new major source facilities in nonattainment areas in Indian 

Country will reduce the need to wait for more information and will make investors more likely to 

invest. 

Existing major sources in nonattainment areas that choose to make a major modification 

to their facilities are also subject to the rule. EPA projects at most one major modification to a 

major source over the first 6 years after rule promulgation. Costs and impacts are estimated to be 

similar to, or lower than, those for a new major source and would be incurred in the absence of 

the rule. 

Existing major source facilities that elect to make minor modifications are also expected 

to incur compliance costs under the rule. EPA estimates that 12 facilities will make minor 

modifications over the entire study period. Although there are company-specific data on existing 

major sources in nonattainment areas, EPA is not able to identify which of the major source 

facilities may decide to make minor modifications. Costs incurred by major sources making 

minor modifications are estimated to be similar to, or lower than, costs incurred by new minor 

source facilities. To assess the relative magnitude of the costs of compliance for each of the 

affected economic sectors, EPA conducted a screening analysis. Comparing the costs of minor 
4-6 

modifications (assumed to be equivalent to the costs for a new minor facility) to typical sales for 

facilities in affected sectors, EPA projected costs to be less than 1% of sales for facilities in all 

major source sectors. 

4.3 Impacts on New Synthetic Minor Sources 

For those sources that choose to accept enforceable emission limitations to become a 

synthetic minor source, no resulting adverse economic impacts are expected for any businesses, 

including small businesses. No impacts are anticipated because this option is entirely optional 

and rational firms would only make this choice if it resulted in a cost savings. Thus, although 

projected new synthetic minor sources are included in the facility counts in this section, EPA 

does not project that such sources will incur incremental costs due to the rule. 

4.4 Impacts on Existing True Minor and Existing Synthetic Minor Sources 

Existing true minor sources and existing synthetic minor sources will be required to 

undertake some MRR activities and, thus, will incur some incremental costs due to the rule. 

During the first year following the effective date of the rule, existing true minor sources will be 

required to register at an estimated cost of $62 per facility. These costs are very low and will 

impose no appreciable burden on existing minor sources. During the first year following the 

effective date of the rule, existing synthetic minor sources are required to submit a permit 

application at an estimated cost of $618 per facility. Again, these costs are sufficiently low that 

they are not expected to impose an appreciable impact on affected existing sources. 

4.5 Small Entity Impact Analysis 

Although all entities owning affected sources are subject to the rule, small entities (small 

businesses, governments, or nonprofit organizations) may have special problems complying with 

regulations because they have fewer financial resources, fewer workers to implement changes, 

and less engineering and legal expertise, for example. The Regulatory Flexibility Act (RFA) of 

1980 as amended in 1996 by the Small Business Regulatory Enforcement Fairness Act 

(SBREFA) generally requires an agency to prepare a regulatory flexibility analysis of a rule 

unless the agency certifies that the rule will not have a significant economic impact on a 

substantial number of small entities (no SISNOSE). 

This document describes the underlying assumptions and computations EPA made in 

estimating the number of affected small entities (in this case, small businesses) and examines the 

rule’s possible impact on these entities. Table 4-3 presents the projected number of new and 

modified sources owned by small entities during the first 6 years following the effective date of 

the rule, together with the Small Business Administration’s Size Standard criteria (SBA, 2010) 

for small businesses under each NAICS code. EPA’s screening assessment used the costs 
4-7 

Table 4-3. Projected Numbers of New and Modified Sources Owned by Small Entities, 

2011–2016, by Industry Sector

NAICS Sector Description 

New 

Minor 

Sources 

Modified 

Minor 

Sources 

Synthetic 

Minor 

Sources 

Minor 

Modifications 

to Major 

Sources 

Total Projected 

Sources Owned 

by Small 

Entities by 

Sector 

324121 Asphalt Hot Mix 1 1 

811121 Auto Body Refinishing 4 6 10 

3116 Beef Cattle Complex, Slaughter House 

and Meat Packing Plant 

1 1 

3251 Chemical Preparation 1 1 

32711 Clay and Ceramics Operations (Kilns) 4 1 5 

327320 Concrete Batching Plant 1 1 

211111 Crude Petroleum and Natural Gas 

Extraction 

1,402 150 3 2 1,557 

22111 Electric Power Generation 1 1 

3329 Fabricated Metal Products 1 1 

3323 Fabricated Structural Metal 1 1 

4471 Gasoline Station (Storage Tanks, 

Refueling) 

19 7 26 

424510 Grain Elevator 3 

33311 Machinery Manufacturing 3 3 

221210 Natural Gas Distribution 1 1 2 

21111 Oil and Gas Production/Operations 

(Minor O&G) 

1 1 

72112 Other (Natural Gas-Fired Boilers)a

 11 10 7 28 

323110 Printing Operations (Lithographic) 3 1 4 

54171 Professional, Scientific, and Technical 

Services 

3 1 4 

212321 Sand and Gravel Mining 1 1 2 

238990 Sand and Shot Blasting Operations 3 1 4 

321113 Sawmills (Minor Source) 1 1 2 

221320 Sewage Treatment Facilities 1 1 

562212 Solid Waste Landfill 1 1 

332812 Surface Coating Operations 5 3 8 

 Other (Costs Not Estimated)b

 54 8 62 

Total 1,521 197 10 2 1,730 

a

Used NAICS for casino/hotels but includes Tribal governments also. 

b

Includes crematories, restaurants, car dealers, social assistance, other unspecified. 
4-8 

applicable beginning 18 months following the effective date of the rule. The screening 

assessment is presented in Tables 4-4 and 4-5. EPA’s screening assessment compares estimated 

lower-bound and upper-bound total annualized costs to facility sales for facilities owned by 

companies with fewer than 500 employees (U.S. Census Bureau, 2002). Table 4-4 presents MRR 

costs as a percentage of sales, which represents the lower-bound costs incurred by new minor 

sources. Table 4-5 presents cost-to-sales ratios for BACT costs plus MRR costs, which 

represents the upper-bound costs that would be incurred by affected new minor sources, and 

likely overstates the costs incurred by most facilities. 

EPA employed criteria (EPA, 2006) widely used in conducting such screening analyses 

to assess the severity of potential impacts. Companies incurring costs less than 1% of sales are 

not expected to incur substantial impacts due to the rule. Companies incurring costs exceeding 

3% of sales are estimated to incur potentially significant impacts. Companies with costs between 

1% and 3% may or may not incur substantial impacts. 

Because EPA does not expect new or major sources or major modifications to major 

sources to experience incremental impacts under the rule, EPA’s analysis of small business 

impacts focuses on impacts associated with new minor source facilities and minor modifications 

to existing minor and major sources. EPA estimates that small businesses investing in new minor 

source facilities, minor modifications to existing minor sources, and minor modifications to 

existing major sources over the period 2011 through 2016 will incur costs that are less than 3% 

of sales in all sectors, even when BACT control costs are included. Under lower-bound costs, 

only new auto body refinishers owned by small businesses are projected to experience costs 

exceeding 1% of sales (1.3%). Under upper-bound costs, most sectors are estimated to incur 

costs less than 1% of average small company sales revenues; however, small companies 

choosing to invest in new minor sources in six sectors—auto body refinishers, concrete batching 

plants, sand and gravel mining, sand and shot blasting, solid waste landfills, and sawmills—are 

estimated to incur costs between 1% and 3% of sales. Whether costs of this magnitude are 

significant is uncertain; however, EPA believes the upper-bound costs are overstated for most 

minor sources. 

Assuming that the share of new sources owned by small businesses is comparable to the 

share of existing sources owned by small businesses (less than 20%), EPA projects that at most 

20 new minor sources or minor modifications would be owned by small businesses in these 

sectors over the 6 years following rule promulgation. Only a very small share of new minor 

sources is projected to incur BACT control costs, so the costs of controls are likely 

overestimated. Thus, EPA does not believe that the rule will impose significant economic 

impacts on a substantial number of small entities (no SISNOSE). 
4-9 

Table 4-4. Lower-Bound Small Business Impacts for New Minor Sources, Minor 

Modifications at Existing Major and Minor Sources, and New Synthetic Minor Sources, 

MRR Costs Only, by Industry Sector 

Source Category 

SBA Size 

Standard in 

Millions of 

Dollars or 

Employees 

Estimated 

Number of 

Affected 

Sources 

Owned by 

Small 

Businesses 

Average Total 

Annualized Cost 

Per Entity 

($103

 2008) 

Costs as 

Percentage of 

Sales for 

Facilities Owned 

by Firms with 

<500 Employees

Asphalt Hot Mix 500 1 $9.44 0.15% 

Auto Body Refinishing $7 10 $9.44 1.30% 

Beef Cattle Complex, Slaughter House and 

Meat Packing Plant 

500 1 $9.44 0.12% 

Chemical Preparation 1,000 1 $9.44 0.07% 

Clay and Ceramics Operations (Kilns) 750 5 $9.44 0.55% 

Concrete Batching Plant 500 1 $9.44 0.23% 

Crude Petroleum and Natural Gas Extraction 500 1,557 $9.44 0.22% 

Electric Power Generation — 1 $9.44 0.04% 

Fabricated Metal Products 500 1 $9.44 0.26% 

Fabricated Structural Metal 500 1 $9.44 0.27% 

Gasoline station (Storage Tanks, Refueling) $27 26 $9.44 0.49% 

Grain Elevator 100 3 $9.44 0.04% 

Machinery Manufacturing 500 3 $9.44 0.22% 

Natural Gas Distribution 500 2 $9.44 0.04% 

Oil and Gas Production/Operations 500 1 $9.44 0.22% 

Other (Natural Gas-Fired Boilers)-Used 

Casino/Hotels 

$30 28 $9.44 0.16% 

Printing Operations (Lithographic) 500 4 $9.44 0.51% 

Professional, Scientific, and Technical 

Services 

500 4 $9.44 0.31% 

Sand and Gravel Mining 500 2 $9.44 0.51% 

Sand and Shot Blasting Operations $14 4 $9.44 0.85% 

Sawmills 500 2 $9.44 0.22% 

Sewage Treatment Facilities $7 1 $9.44 0.93% 

Solid Waste Landfill $12.5 1 $9.44 0.46% 

Surface Coating Operations 500 8 $9.44 0.30% 

Other (Costs Not Estimated) 62 

Total 1,730 
4-10 

Table 4-5. Upper-Bound Small Business Impacts for New Minor Sources, Minor 

Modifications at Existing Major and Minor Sources, and New Synthetic Minor Sources, 

BACT and MRR Costs, by Industry Sector 

Source Category 

SBA Size 

Standard in 

Millions of 

Dollars or 

Employees 

Estimated 

Number of 

Affected 

Sources 

Owned by 

Small 

Businesses 

Average Total 

Annualized Cost 

Per Entity 

($103

 2008) 

Costs as 

Percentage of 

Sales for 

Facilities Owned 

by Firms with 

<500 Employees

Asphalt Hot Mix 500 1 $9.44 0.15% 

Auto Body Refinishing $7 10 $9.44 1.30% 

Beef Cattle Complex, Slaughter House and 

Meat Packing Plant 

500 1 $18.47 0.24% 

Chemical Preparation 1,000 1 $9.44 0.07% 

Clay and Ceramics Operations (Kilns) 750 5 $9.44 0.55% 

Concrete Batching Plant 500 1 $135.13 2.94% 

Crude Petroleum and Natural Gas Extraction 500 1,557 $9.44 0.22% 

Electric Power Generation — 1 $9.44 0.04% 

Fabricated Metal Products 500 1 $9.44 0.26% 

Fabricated Structural Metal 500 1 $9.44 0.27% 

Gasoline Station (Storage Tanks, Refueling) $27 26 $9.99 0.51% 

Grain Elevator 100 3 $69.36 NA 

Machinery Manufacturing 500 3 $9.44 0.22% 

Natural Gas Distribution 500 2 $9.44 0.04% 

Oil and Gas Production/Operations 500 1 $9.44 0.22% 

Other (Natural Gas-Fired Boilers)-Used 

Casino/Hotels 

$30 28 $18.47 0.30% 

Printing Operations (Lithographic) 500 4 $11.64 0.63% 

Professional, Scientific, and Technical 

Services 

500 4 $18.47 0.60% 

Sand and Gravel Mining 500 2 $49.35 2.65% 

Sand and Shot Blasting Operations $14 4 $19.77 1.77% 

Sawmills 500 2 $49.35 1.13% 

Sewage Treatment Facilities $7 1 $9.44 0.93% 

Solid Waste Landfill $12.5 1 $49.58 2.40% 

Surface Coating Operations 500 8 $9.44 0.30% 

Other (Costs Not Estimated) 62 

Total 1,730 
4-11 

Based on its analysis, EPA concludes that the rule is not expected to result in significant 

economic impacts for a substantial number of small companies (no SISNOSE). This conclusion 

is reached because the number of small companies affected in most industries is expected to be 

small and because the costs for most industries are expected to be low. Small businesses 

investing in new minor sources in six industries (auto body refinishers, concrete batching plants, 

sand and gravel mining, sand and shot blasting, solid waste landfills, and sawmills) may incur 

costs between 1% and 3% of their sales to comply with the rule. Because at most 20 small 

companies may experience costs exceeding 1% of sales (when upper-bound costs are considered) 

and no small company is projected to experience costs exceeding 3% of sales, and because the 

upper-bound costs overestimate costs for most minor sources, EPA does not believe that a 

substantial number of small companies will experience significant economic impacts. 
R-1 

SECTION 5 

REFERENCES 

U.S. Census Bureau. 1996. Projected State Populations, by Sex, Race and Hispanic Origin, 

1995–2025. http://www.census.gov/population/projections/state/stpjrace.txt. 

U.S. Census Bureau. County Business Patterns, 2007. http://www.census.gov/econ/cbp/ 

index.html. 

U.S. Census Bureau. Statistics of U.S. Businesses, 2002. http://www.census.gov/econ/susb/ 

introduction.html. 

U.S. Department of Labor. Bureau of Labor Statistics (BLS). 2002. March 2002 Employment 

Cost Trends. http://stats.bls.gov/news.release/ecec.t02.htm. 

U.S. Department of Labor. Bureau of Labor Statistics (BLS). 2009. Producer Price Index. 

http://www.bls.gov/ppi/. 

U.S. Environmental Protection Agency (EPA). November 2006. Final Guidance for EPA 

Rulewriters: Regulatory Flexibility Act as Amended by the Small Business Regulatory 

Enforcement Fairness Act. http://www.epa.gov/sbrefa/documents/rfaguidance11-00-

06.pdf. 

U.S. Environmental Protection Agency (EPA). 2001. EPA Air Pollution Control Cost Manual. 

http://www.epa.gov/ttn/catc/products.html. 

U.S. Environmental Protection Agency (EPA). 2011. Supporting Statement for the Review of 

New Sources and Modifications in Indian Country Rule.

U.S. Small Business Administration. November 5, 2010. Table of Small Business Size Standards 

Matched to North American Industry Classification Codes. 

http://www.sba.gov/idc/groups/public/documents/sba_homepage/serv_sstd_tablepdf.pdf. 
APPENDIX A: 

METHOD FOR ESTIMATING EXISTING TRUE MINOR SOURCES AND 

PROJECTING NEW TRUE MINOR SOURCES 
A-1 

The figure below depicts a schematic presentation of the methods EPA used to first 

estimate the number of existing minor sources in Indian Country and then to project the number 

of new minor sources in Indian Country during the first 6 years following the effective date of 

the rule. EPA’s methods combined information from existing Tribal emissions inventories to 

identify typical minor source types, then used Economic Census data to estimate the number of 

such sources nationwide, and then allocated a share to Indian Country based on Census 

demographic data. EPA then requested review from Tribal experts in EPA Regions and revised 

the estimated number of existing sources of each type based on this feedback. Finally, EPA 

projected the number of new minor sources during the first 6 years following the effective date 

of the rule based on projected annual growth rates for the AIAN population. This process is 

discussed in greater detail in Section 2. 
A-2 

Methodology for Estimating Existing Minor Sources and Projecting New Minor Sources 
APPENDIX B: 

ESTIMATED CONTROL COSTS FOR AFFECTED MAJOR AND MINOR SOURCES 

IN INDIAN COUNTRY 
B-1 

Table B-1. Estimated Control Costs for Affected Major and Minor Sources in Indian Country 

Source Category NAICS 

Process Throughput 

Capacity 

Baseline Control 

Technology 

Baseline 

Emissions BACT 

BACT 

Emissions 

Animal Food Manufacturing 

311119 3,650 tpy No control 16.9 tpy PM Fabric filter or 

cyclone 

0.84 tpy PM 

Asphalt Hot Mix 324121 100,000 tpy Fabric filter 1.3 tpy PM 

0.2 tpy VOC 

Same as baseline 1.3 tpy PM 

0.2 tpy VOC 

Auto Body Refinishing 

81112 Filter technology, 

ventilated spray booth enclosures, use of low-VOC coatings, work practices 

3 tpy VOC Same as baseline 3 tpy 

Beef Cattle Complex, Slaughter House and Meat Packing Plant 

3116 <10 MM 

Btu/hr 

No control 6.7 tpy NOx 3.0 

tpy CO 

FGR or low NOxburners 

3.5 tpy NOx3.0 tpy CO 

Casting Foundry (Iron) 

331511 16,606 tpy Fabric filter, wet 

scrubber, triethylamine (TEA) scrubber 

4.6 tpy PM, .014 tpy SO2, 11.19 tpy VOC 

Baseline controls plus binder substitution and carbon adsorption 

4.6 tpy PM, .014 tpy SO2, 4.5 tpy VOC 

Chemical Preparation 3251 30,000 (tons/year) Wet scrubber 1.2 tpy CO, 0.73 

tpy NOx, 0.27 tpy PM, 1.27 tpy SOx, 0.37 tpy VOC 

Same as baseline 1.2 tpy CO, 

0.73 tpy NOx, 0.27 tpy PM, 1.27 tpy SOx, 0.37 tpy VOC 
B-2 

Table B-1. Estimated Control Costs for Affected Major and Minor Sources in Indian Country (continued) 

Source Category NAICS 

Process 

Throughput 

Capacity 

Baseline Control 

Technology 

Baseline 

Emissions BACT 

BACT 

Emissions 

Clay and Ceramics Operations (Kilns) 

32711 NA None None None None 

Concrete Batching Plant 

327320 120,780 tpy Bin vent filter 7.3 tpy PM10, 

14.6 tpy PM 

Baseline controls plus fabric filter 

5.1 tpy PM, 1.6 tpy PM10

Crude Petroleum and Natural Gas Extraction 

2111 250 hp Best management 

practices 

4.8 tpy NOx, 9.7 

tpy CO, 3.4 tpy VOC 

Same as baseline 4.8 tpy NOx, 

9.7 tpy CO, 3.4 tpy VOC 

Electric Power Generation 

22111 4,000 MMBtu/hr Fabric filter, SCR, 

sorbent injection, flue gas desulfurization (FGD) 

179 tpy PM, 2,234 tpy CO, 968 tpy NOx, 1,191 tpy SO2, 54 tpy VOC 

Same as baseline 179 tpy PM, 

2,234 tpy CO, 968 tpy NOx, 1,191 tpy SO2, 54 tpy VOC 

Fabricated Metal Products 

3329 NA No control NA Comply with 

equipment standards 

2 tpy PM 

Fabricated Structural Metal 

3323 NA No control NA Comply with 

equipment standards, use lowemitting and pollutionpreventing spray gun technology 

2 tpy PM 
B-3 

Table B-1. Estimated Control Costs for Affected Major and Minor Sources in Indian Country (continued) 

Source Category NAICS 

Process 

Throughput 

Capacity 

Baseline Control 

Technology 

Baseline 

Emissions BACT 

BACT 

Emissions 

Fiber Glass Operations 

3279 25,000 tpy Baghouse, 

incinerator, and wet scrubber 

6.9 tpy PM, 68.8 NOx, 1.7 tpy CO 

Same as baseline 6.9 tpy PM, 

68.8 NOx, 

1.7 tpy CO 

Gasoline Bulk Plant 242710 6,500 gallons/day Submerged loading 

controls 

18.5 tpy VOC Vapor balancing 

systems 

1.9 tpy VOC 

Gasoline Station (Storage Tanks, Refueling) 

4471 1,200 gal/day No control 2.2 tpy VOC Stage I vapor 

balance 

0.1 tpy VOC 

Grain Elevator 424510 10,000 tpy (4MM 

Bu/yr) 

Work practices 5 tpy PM10 Baghouse .05 tpy PM 10 

Machinery Manufacturing 

33311 Need more 

information to estimate costs (e.g., what type of machinery?) 

Millwork (Wood Products Mfg) 

32191 66,000 m3 per year Wet electrostatic 

precipitator (WESP) 

13.1 tpy CO, 44.3 tpy VOC, 3.31 tpy NOx, 5.78 tpy PM 

Regenerative thermal oxidizer/ regenerative catalytic oxidizer (RTO/RCO) 

1.91 tpy CO, 10.5 tpy VOC 

Oil and Natural Gas Extraction (Major Source) 

2111 4000 hp No control 557.3 tpy NOx Nonselective 

catalytic reduction 

11.1 tpy NOx 
B-4 

Table B-1. Estimated Control Costs for Affected Major and Minor Sources in Indian Country (continued) 

Source Category NAICS 

Process 

Throughput 

Capacity 

Baseline Control 

Technology 

Baseline 

Emissions BACT 

BACT 

Emissions 

Oil and Gas Production/ Operations (Minor O&G) 

2111 500 Best management 

practices 

4.8 tpy NOx, 9.7 

tpy CO, 3.4 tpy VOC 

Same as baseline 4.8 tpy NOx, 

9.7 tpy CO, 3.4 tpy VOC 

Other (Natural GasFired Boilers) 921150 <10 MM Btu/hr No control 6.7 tpy NOx 3.0 tpy CO FGR or low NOx burners 3.5 tpy NOx 3.0 tpy CO Pipeline Transportation of Natural Gas 

486210 1,500 hp Best management 

practices 

5.9 tpy NOx, 

SO2, 4.5 tpy 

Same as baseline 5.9 tpy NOx, 

SO2, 4.5 tpy 

Printing Operations (Lithographic) 

32311 48 tpy (ink use) No control 6 tpy VOC Add-on control 

devices and pollution prevention measures (lowVOC inks and cleaning solutions) 

3.5 tpy VOC 

Professional, Scientific, and Technical Services 

54171 <10 MM 

Btu/hr 

No control 6.7 tpy NOx, 3.0 

tpy CO 

FGR or low NOxburners 

3.5 tpy NOx3.0 tpy CO 

Sand and Gravel Mining 

212321 140,000 tpy No control 12.6 tpy PM10 Fugitive dust 

suppression controls 

2.5 tpy PM10 

Sand and Shot Blasting Operations 

238990 10 tpy No control 0.13 tpy PM10 Fabric filter 0.007 tpy 

PM10

Sawmills (Minor Source) 

321113 100,000 tpy logs No control or low 

efficiency cyclones 

31 tpy PM Fugitive dust 

suppression controls 

1.5 tpy PM 
B-5 

Table B-1. Estimated Control Costs for Affected Major and Minor Sources in Indian Country (continued) 

Source Category NAICS 

Process 

Throughput 

Capacity 

Baseline Control 

Technology 

Baseline 

Emissions BACT 

BACT 

Emissions 

Sawmills (Major Source) 

321113 300,000 tpy logs No control or low 

efficiency cyclones 

93 tpy PM Fugitive dust 

suppression controls and fabric filter 

4.5 tpy PM 

Sewage Treatment Facilities 

221320 NA No control NA No control NA 

Softwood Veneer and Plywood Manufacturing 

321212 66,000 m3 per year WESP 13.1 tpy CO, 

44.3 tpy VOC, 3.31 tpy NOx, 5.78 tpy PM 

RTO/RCO 1.91 tpy CO, 

10.5 tpy VOC 

Solid Waste Landfill 562212 < 0.5 million tons 

(capacity) [3,000 tpy loading](c3)

No control 25 tpy VOC Gas collection 

system and control device 

6.3 tpy VOC 

Surface Coating Operations 

332812 General coating 

operation (e.g., can coating) 

Filter technology, ventilated spray booth enclosures, use of low-VOC coatings, work practices 

3 tpy VOC Same as baseline 3 tpy 

Wood Kitchen Cabinet Manufacturing 

337110 66,000 m3 per year WESP 13.1 tpy CO, 

44.3 tpy VOC, 3.31 tpy NOx, 5.78 tpy PM 

RTO, RCO 1.91 tpy CO, 

10.5 tpy VOC 

United States 

Environmental Protection Agency 

Office of Air Quality Planning and Standards 

Air Quality Strategies and Standards Division 

Research Triangle Park, NC 

Publication N